Re: Washington Mutual Inc. to go ahead with its investigation of JPMorgan Chase & Co - Law360, New York (July 28, 2009)

[I love WAMU !]

From: Nicole - nicole100w...@gmail.com

Law360, New York (July 28, 2009) -- A bankruptcy judge has refused to
reverse an earlier decision allowing Washington Mutual Inc. to go
ahead with its investigation of JPMorgan Chase & Co. for evidence
that
JPMorgan sabotaged WaMu in order to acquire it at a depressed value.


Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District
of
Delaware on Monday denied JPMorgan's motion to reconsider an earlier
order greenlighting the investigation.


The judge ordered the parties to produce witness lists by Saturday,
according to Kevin Spittle, principal of Capital Search Group, a WaMu
investor familiar with the case. WaMu's witness list will likely
include JPMorgan CEO Jaime Dimon, he said.


Attorneys for WaMu and JPMorgan could not immediately be reached for
comment on Tuesday.


Judge Walrath originally signed off on WaMu's motion to examine
JPMorgan's books on June 24, and JPMorgan filed its reconsideration
motion two days later.


WaMu had asked the court on May 1 for access to JPMorgan's books so
that it could look for evidence supporting allegations that JPMorgan
crafted a plot to undermine the one-time savings and loan giant prior
to its 2008 collapse in order to buy up its banking assets cheaply.


JPMorgan objected to the request, stating that WaMu must seek the
information it wanted in two separate pending lawsuits.


In one of those suits, WaMu sued the Federal Deposit Insurance Corp.,
which seized WaMu's assets and sold them to JPMorgan, in the U.S.
District Court for the District of Columbia, alleging that the
purchase price was too low and that the agency sold assets it had no
right to seize. JPMorgan asked to intervene in that suit as a
defendant.


JPMorgan also filed its own adversary proceeding against WaMu,
seeking
declaratory judgments asserting that it acquired the debtor in good
faith and that it was the owner of $7.9 billion in disputed assets.


However, Judge Walrath found that the issues in those suits were
separate from those involved in WaMu's proposed investigation.


WaMu's request for an investigation was prompted by a lawsuit filed
by
a group of WaMu investors against JPMorgan in the U.S. District Court
for the Southern District of Texas.


The investors allege that JPMorgan deliberately drove down the value
of Washington Mutual Bank by abusing confidential information and
that
JPMorgan engaged in sham negotiations with WaMu throughout 2008 about
buying the banking arm in order to obtain confidential information.


JPMorgan then shared that information with WaMu bank customers to
persuade them to withdraw their deposits, leaked information to the
media to depress the bank's stock value and ultimately used it in its
negotiations with the FDIC, allowing JPMorgan to acquire WaMu's bank
assets for a "fire sale" price, the investors claim.


WaMu has said it wants to investigate JPMorgan to find out of those
allegations are true.


WaMu filed for Chapter 11 protection on Sept. 26, citing
approximately
$33 billion in total assets and $8.2 billion in debts.


WaMu is represented by Elliott Greenleaf and Quinn Emanuel Urquhart
Oliver & Hedges LLP.


JPMorgan is represented by Landis Rath & Cobb LLP and Sullivan &
Cromwell LLP.


The case is In re: Washington Mutual Inc., case number 08-12229, in
the U.S. Bankruptcy Court for the District of Delaware.


--Additional reporting by Jacqueline Bell and Christine Caulfield


http://www.law360.com/articles/113535