WILMINGTON, Del. (AP) — A Delaware judge is refusing to allow bank holding company Washington Mutual Inc. to proceed with its reorganization efforts without engaging in mediation with various creditors.
In rejecting WaMu’s reorganization plan for a second time last month, the judge had cited several issues. One issue included claims by equity security holders that hedge funds supporting the plan had engaged in insider trading of WMI debt based on information obtained during the bankruptcy.
Washington Mutual responded by modifying its proposed plan and urging the judge to limit mediation to the insider trading claims.
After a hearing Thursday, the judge disagreed. She ordered Washington Mutual to engage in mediation on all outstanding issues noted in her opinion from last month and set an initial deadline of Nov. 7 for a report from the mediator.
