Tuesday, 31 May 2016
Last updated 3 days ago
Feb 2 2012 | 10:04am ET
A federal bankruptcy court judge has approved a hedge fund's claim against Washington Mutual.
Tranquility Master Fund claims it was misled into buying $71 million worth of mortgage-backed securities from the bankrupt bank. U.S. Bankruptcy Judge Mary Walrath ruled yesterday that the hedge fund can asset claims of up to $10 million for the purpose of voting on WaMu's latest bankruptcy exit plan. Walrath will consider that plan later this month.
At the same hearing, Walrath will decide whether to approve a settlement between WaMu and Tranquility under which the latter would drop a $49 million claim against the former in exchange for a general unsecured claim of $9 million and as much as $1 million more, if there is any money left after repayment of other creditors.