FDIC Appeals Ruling In Bid To Dismiss WaMu Suits
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nicole...@gmail.com
Sep 22, 2009, 7:28:31 AM9/22/09
to Washington Mutual
From: Nicole - nicole...@gmail.com
By Hilary Russ
Law360, New York (September 21, 2009) -- The Federal Deposit Insurance
Corp. has filed an appeal brief over a bankruptcy court's denial of
motions to stay or dismiss two adversary cases in Washington Mutual
Inc.'s Chapter 11 proceedings, seeking a determination on whether the
bankruptcy court overstepped its bounds.
As the recy Hilary Russ
Law360, New York (September 21, 2009) -- The Federal Deposit Insurance
Corp. has filed an appeal brief over a bankruptcy court's denial of
motions to stay or dismiss two adversary cases in Washington Mutual
Inc.'s Chapter 11 proceedings, seeking a determination on whether the
bankruptcy court overstepped its bounds.
As the receiver in WaMu's Chapter 11, the FDIC on Friday filed its
brief in the U.S. District Court for the District of Delaware, arguing
that the bankruptcy court should not have denied two motions to stay
or dismiss the adversary proceedings.
In June, the FDIC and JPMorgan Chase NA fired back against WaMu in
their feud over which court should hear the adversary proceedings,
which concern the control of assets that include $4 billion in demand
deposits.
JPMorgan and the FDIC claimed that a district court should have
jurisdiction over the adversary cases because substantial questions of
federal law exist in the conflicts.
Citing questions raised under the Financial Institutions Reform,
Recovery and Enforcement Act, which governs failed banking
institutions, JPMorgan asked the bankruptcy court to either withdraw
the cases to the U.S. District Court for the District of Delaware or
transfer them to the U.S. District Court for the District of Columbia,
where WaMu has launched a suit against the FDIC.
“Granting permissive withdrawal and a subsequent motion to transfer is
the only manner in which the intertwined issues in the adversary
proceedings and the D.C. action can be adjudicated uniformly and
comprehensively without the risk of conflicting determinations,” the
memorandum said.
WaMu argued that denying the FDIC's motions would help to expedite the
bankruptcy process, with the debtor and its creditors “badly in need
of their cash deposits” to formulate a viable Chapter 11 restructuring
plan.
JPMorgan launched the first adversary case at issue on March 24,
seeking a declaration that it is the rightful owner of certain WaMu
assets, including $4 billion in core capital, $3.7 billion in deposit
credit and $234 million in tax benefits, as well as intellectual
property, Visa Inc. shares and employee benefit funds. That suit named
the FDIC as an interpleader defendant.
WaMu fired back on April 27 with an adversary proceeding of its own,
seeking $4 billion in cash held in the deposit accounts of subsidiary
Washington Mutual Bank at the time the bank was seized and sold by the
FDIC to JPMorgan for $1.9 billion.
In its appeal, the FDIC presents two main questions it wants resolved
by the district court.
First, whether the bankruptcy court erred in asserting that it had
jurisdiction in the adversary cases, according to the brief.
Second, whether the bankruptcy court was wrong to let the adversary
cases proceed “despite the pendency of an earlier-filed district court
action in which the debtors raised substantially identical claims
against the FDIC-receiver,” the brief said.
If the appeals aren't certified for direct appeal to the U.S. Court of
Appeals for the Third Circuit, the orders from the bankruptcy court
should be reversed and the adversary cases should be dismissed for
lack of jurisdiction or stayed until WaMu's case against the FDIC is
resolved, the brief said.
WaMu sued the FDIC in late March in an attempt to recover $6.5 million
in capital contributions, $4 billion in preferred securities and $3
billion in tax refunds related to the $1.9 billion sale.
The financial giant filed for Chapter 11 on Sept. 26, 2008, 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.
The FDIC is represented by Young Conaway Stargatt & Taylor LLP.
JPMorgan is represented by Landis Rath & Cobb LLP and Sullivan &
Cromwell LLP.
The appeal is Federal Deposit Insurance Corp. v. Washington Mutual
Inc., case number 1:09-cv-00616-GMS, in the U.S. District Court for
the District of Delaware.
The bankruptcy 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 Leigh Kamping-Carder
eiver in WaMu's Chapter 11, the FDIC on Friday filed its brief in the
U.S. District Court for the District of Delaware, arguing that the
bankruptcy court should not have denied two motions to stay or dismiss
the adversary proceedings.
In June, the FDIC and JPMorgan Chase NA fired back against WaMu in
their feud over which court should hear the adversary proceedings,
which concern the control of assets that include $4 billion in demand
deposits.
JPMorgan and the FDIC claimed that a district court should have
jurisdiction over the adversary cases because substantial questions of
federal law exist in the conflicts.
Citing questions raised under the Financial Institutions Reform,
Recovery and Enforcement Act, which governs failed banking
institutions, JPMorgan asked the bankruptcy court to either withdraw
the cases to the U.S. District Court for the District of Delaware or
transfer them to the U.S. District Court for the District of Columbia,
where WaMu has launched a suit against the FDIC.
“Granting permissive withdrawal and a subsequent motion to transfer is
the only manner in which the intertwined issues in the adversary
proceedings and the D.C. action can be adjudicated uniformly and
comprehensively without the risk of conflicting determinations,” the
memorandum said.
WaMu argued that denying the FDIC's motions would help to expedite the
bankruptcy process, with the debtor and its creditors “badly in need
of their cash deposits” to formulate a viable Chapter 11 restructuring
plan.
JPMorgan launched the first adversary case at issue on March 24,
seeking a declaration that it is the rightful owner of certain WaMu
assets, including $4 billion in core capital, $3.7 billion in deposit
credit and $234 million in tax benefits, as well as intellectual
property, Visa Inc. shares and employee benefit funds. That suit named
the FDIC as an interpleader defendant.
WaMu fired back on April 27 with an adversary proceeding of its own,
seeking $4 billion in cash held in the deposit accounts of subsidiary
Washington Mutual Bank at the time the bank was seized and sold by the
FDIC to JPMorgan for $1.9 billion.
In its appeal, the FDIC presents two main questions it wants resolved
by the district court.
First, whether the bankruptcy court erred in asserting that it had
jurisdiction in the adversary cases, according to the brief.
Second, whether the bankruptcy court was wrong to let the adversary
cases proceed “despite the pendency of an earlier-filed district court
action in which the debtors raised substantially identical claims
against the FDIC-receiver,” the brief said.
If the appeals aren't certified for direct appeal to the U.S. Court of
Appeals for the Third Circuit, the orders from the bankruptcy court
should be reversed and the adversary cases should be dismissed for
lack of jurisdiction or stayed until WaMu's case against the FDIC is
resolved, the brief said.
WaMu sued the FDIC in late March in an attempt to recover $6.5 million
in capital contributions, $4 billion in preferred securities and $3
billion in tax refunds related to the $1.9 billion sale.
The financial giant filed for Chapter 11 on Sept. 26, 2008, 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.
The FDIC is represented by Young Conaway Stargatt & Taylor LLP.
JPMorgan is represented by Landis Rath & Cobb LLP and Sullivan &
Cromwell LLP.
The appeal is Federal Deposit Insurance Corp. v. Washington Mutual
Inc., case number 1:09-cv-00616-GMS, in the U.S. District Court for
the District of Delaware.
The bankruptcy 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 Leigh Kamping-Carder
http://www.law360.com/articles/123458
By Hilary Russ
Law360, New York (September 21, 2009) -- The Federal Deposit Insurance
Corp. has filed an appeal brief over a bankruptcy court's denial of
motions to stay or dismiss two adversary cases in Washington Mutual
Inc.'s Chapter 11 proceedings, seeking a determination on whether the
bankruptcy court overstepped its bounds.
As the recy Hilary Russ
Law360, New York (September 21, 2009) -- The Federal Deposit Insurance
Corp. has filed an appeal brief over a bankruptcy court's denial of
motions to stay or dismiss two adversary cases in Washington Mutual
Inc.'s Chapter 11 proceedings, seeking a determination on whether the
bankruptcy court overstepped its bounds.
As the receiver in WaMu's Chapter 11, the FDIC on Friday filed its
brief in the U.S. District Court for the District of Delaware, arguing
that the bankruptcy court should not have denied two motions to stay
or dismiss the adversary proceedings.
In June, the FDIC and JPMorgan Chase NA fired back against WaMu in
their feud over which court should hear the adversary proceedings,
which concern the control of assets that include $4 billion in demand
deposits.
JPMorgan and the FDIC claimed that a district court should have
jurisdiction over the adversary cases because substantial questions of
federal law exist in the conflicts.
Citing questions raised under the Financial Institutions Reform,
Recovery and Enforcement Act, which governs failed banking
institutions, JPMorgan asked the bankruptcy court to either withdraw
the cases to the U.S. District Court for the District of Delaware or
transfer them to the U.S. District Court for the District of Columbia,
where WaMu has launched a suit against the FDIC.
“Granting permissive withdrawal and a subsequent motion to transfer is
the only manner in which the intertwined issues in the adversary
proceedings and the D.C. action can be adjudicated uniformly and
comprehensively without the risk of conflicting determinations,” the
memorandum said.
WaMu argued that denying the FDIC's motions would help to expedite the
bankruptcy process, with the debtor and its creditors “badly in need
of their cash deposits” to formulate a viable Chapter 11 restructuring
plan.
JPMorgan launched the first adversary case at issue on March 24,
seeking a declaration that it is the rightful owner of certain WaMu
assets, including $4 billion in core capital, $3.7 billion in deposit
credit and $234 million in tax benefits, as well as intellectual
property, Visa Inc. shares and employee benefit funds. That suit named
the FDIC as an interpleader defendant.
WaMu fired back on April 27 with an adversary proceeding of its own,
seeking $4 billion in cash held in the deposit accounts of subsidiary
Washington Mutual Bank at the time the bank was seized and sold by the
FDIC to JPMorgan for $1.9 billion.
In its appeal, the FDIC presents two main questions it wants resolved
by the district court.
First, whether the bankruptcy court erred in asserting that it had
jurisdiction in the adversary cases, according to the brief.
Second, whether the bankruptcy court was wrong to let the adversary
cases proceed “despite the pendency of an earlier-filed district court
action in which the debtors raised substantially identical claims
against the FDIC-receiver,” the brief said.
If the appeals aren't certified for direct appeal to the U.S. Court of
Appeals for the Third Circuit, the orders from the bankruptcy court
should be reversed and the adversary cases should be dismissed for
lack of jurisdiction or stayed until WaMu's case against the FDIC is
resolved, the brief said.
WaMu sued the FDIC in late March in an attempt to recover $6.5 million
in capital contributions, $4 billion in preferred securities and $3
billion in tax refunds related to the $1.9 billion sale.
The financial giant filed for Chapter 11 on Sept. 26, 2008, 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.
The FDIC is represented by Young Conaway Stargatt & Taylor LLP.
JPMorgan is represented by Landis Rath & Cobb LLP and Sullivan &
Cromwell LLP.
The appeal is Federal Deposit Insurance Corp. v. Washington Mutual
Inc., case number 1:09-cv-00616-GMS, in the U.S. District Court for
the District of Delaware.
The bankruptcy 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 Leigh Kamping-Carder
eiver in WaMu's Chapter 11, the FDIC on Friday filed its brief in the
U.S. District Court for the District of Delaware, arguing that the
bankruptcy court should not have denied two motions to stay or dismiss
the adversary proceedings.
In June, the FDIC and JPMorgan Chase NA fired back against WaMu in
their feud over which court should hear the adversary proceedings,
which concern the control of assets that include $4 billion in demand
deposits.
JPMorgan and the FDIC claimed that a district court should have
jurisdiction over the adversary cases because substantial questions of
federal law exist in the conflicts.
Citing questions raised under the Financial Institutions Reform,
Recovery and Enforcement Act, which governs failed banking
institutions, JPMorgan asked the bankruptcy court to either withdraw
the cases to the U.S. District Court for the District of Delaware or
transfer them to the U.S. District Court for the District of Columbia,
where WaMu has launched a suit against the FDIC.
“Granting permissive withdrawal and a subsequent motion to transfer is
the only manner in which the intertwined issues in the adversary
proceedings and the D.C. action can be adjudicated uniformly and
comprehensively without the risk of conflicting determinations,” the
memorandum said.
WaMu argued that denying the FDIC's motions would help to expedite the
bankruptcy process, with the debtor and its creditors “badly in need
of their cash deposits” to formulate a viable Chapter 11 restructuring
plan.
JPMorgan launched the first adversary case at issue on March 24,
seeking a declaration that it is the rightful owner of certain WaMu
assets, including $4 billion in core capital, $3.7 billion in deposit
credit and $234 million in tax benefits, as well as intellectual
property, Visa Inc. shares and employee benefit funds. That suit named
the FDIC as an interpleader defendant.
WaMu fired back on April 27 with an adversary proceeding of its own,
seeking $4 billion in cash held in the deposit accounts of subsidiary
Washington Mutual Bank at the time the bank was seized and sold by the
FDIC to JPMorgan for $1.9 billion.
In its appeal, the FDIC presents two main questions it wants resolved
by the district court.
First, whether the bankruptcy court erred in asserting that it had
jurisdiction in the adversary cases, according to the brief.
Second, whether the bankruptcy court was wrong to let the adversary
cases proceed “despite the pendency of an earlier-filed district court
action in which the debtors raised substantially identical claims
against the FDIC-receiver,” the brief said.
If the appeals aren't certified for direct appeal to the U.S. Court of
Appeals for the Third Circuit, the orders from the bankruptcy court
should be reversed and the adversary cases should be dismissed for
lack of jurisdiction or stayed until WaMu's case against the FDIC is
resolved, the brief said.
WaMu sued the FDIC in late March in an attempt to recover $6.5 million
in capital contributions, $4 billion in preferred securities and $3
billion in tax refunds related to the $1.9 billion sale.
The financial giant filed for Chapter 11 on Sept. 26, 2008, 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.
The FDIC is represented by Young Conaway Stargatt & Taylor LLP.
JPMorgan is represented by Landis Rath & Cobb LLP and Sullivan &
Cromwell LLP.
The appeal is Federal Deposit Insurance Corp. v. Washington Mutual
Inc., case number 1:09-cv-00616-GMS, in the U.S. District Court for
the District of Delaware.
The bankruptcy 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 Leigh Kamping-Carder
http://www.law360.com/articles/123458
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