Washington Mutual reaches settlement

[December 13, 2011]  SEATTLE (AP) -- Bank holding company Washington Mutual Inc. says it has agreed to a settlement with some creditors involved in its Chapter 11 bankruptcy case and has filed a new reorganization plan.

Washington Mutual said in a statement late Monday that the settlement will allow it to distribute more than $7 billion to its creditors. The settlement must still be approved by the U.S. Bankruptcy Court for the District of Delaware.

Washington Mutual's bankruptcy case is three years old and its reorganization plans have twice been rejected by Bankruptcy Court Judge Mary Walrath.

The Federal Deposit Insurance Corp. seized WaMu's Seattle-based flagship bank in 2008 and sold its assets to JPMorgan for $1.9 billion in the largest bank failure in U.S. history.

[Associated Press]

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