Saturday March 21, 2009
Navivest

Washington Mutual Inc, the former parent of Washington Mutual, the savings and loans that was seized by federal regulators on September 25, 2008 and its assets sold to JP Morgan Chase (JPM), causing the largest U.S. bank failure to date, has sued the Federal Deposit Insurance Corp for about $13 billion.

The company argues that the government’s seizure and forced sale of the bank’s assets for just $1.9 billion, cause it to lose $6.5 billion of capital contributions it had made to the Washington Mutual banking unit from December 2007 through the seizure.

In a complaint filed with the US District Court for the District of Columbia, Washington Mutual Inc, is accusing the FDIC of making a “cryptic disallowance” of its claims on January 23, forcing it to file the lawsuit.

The sale of the holding company was not included in the FDIC’s September 25 transaction with JPMorgan and the company filed for Chapter 11 bankruptcy protection the following day.

Washington Mutual is also seeking the return of $4 billion of trust preferred securities it claims were wrongfully transferred to the banking unit, and said it may be entitled to as much as $3 billion of tax refunds. It also seeks damages of $177.1 million related to unpaid loans made to the banking unit.

washington mutual jp morgan fdic