DOVER, Del. (AP) — A Delaware judge has refused for the second time to confirm bank holding company Washington Mutual Inc.’s reorganization plan.
In a 139-page ruling issued late Tuesday, the judge said opponents of the plan had stated a reasonable claim that certain hedge funds supporting the plan had engaged in insider trading of WMI securities during the bankruptcy.
The reorganization plan is based on a settlement of lawsuits that pitted Washington Mutual, the Federal Deposit Insurance Corp. and JPMorgan Chase against one another after the FDIC 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.
The judge had previously declared the settlement reasonable but said certain revisions to the plan were needed before it could be approved.
