WaMu Bankruptcy Plan Approved

Feb 21 2012 | 1:24am ET

More than three years after the collapse that triggered it, Washington Mutual's bankruptcy is near an end.

A federal bankruptcy judge in Delaware on Friday approved the former bank's Chapter 11 exit plan. U.S. Bankruptcy Judge Mary Walrath had twice before rejected reorganization plans in a case that prominently featured hedge funds and private equity firms at almost every turn.

The approval of the $7 billion sets the stage for creditors—prevalent among them alternative investors who snapped up WaMu debt for pennies on the dollar—to begin receiving payments in just weeks. A lawyer for the company's unsecured creditors said March 8 is the likely date for the first big payout.

Four hedge funds—Appaloosa Management, Aurelius Capital Partners, Centerbridge Partners and Owl Creek Management—played a role in crafting WaMu's first bid to exit bankruptcy. But the four refused to renew their support for the plan last year, leading some shareholders to accuse them of insider trading. Walrath said last month she would vacate a ruling she made last year allowing an insider-trading lawsuit against the hedge funds to proceed if she approved the bankruptcy plan.

More recently—last week—another group of hedge funds threatened to derail the bankruptcy plan, voting against it before switching their votes following an agreement giving them a stake in the reinsurance company that will emerge from the WaMu bankruptcy.

"I have never seen a case where the shareholders have been so active," Walrath said.


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.