Thursday, September 25, 2008

Washington Mutual (banks only) Sold to JP Morgan Chase

"JPMorgan Chase acquired the assets, assumed the qualified financial contracts and made a payment of $1.9 billion. Claims by equity, subordinated and senior debt holders were not acquired."

-- FDIC Press Release

WaMu was closed tonight by the OTS & FDIC. JPM acquired the banks only (Washington Mutual Bank & Washington Mutual Bank FSB), leaving common share holders, preferred share holders and debt holders holding the bag. The $1.9 billion payment was made to the FDIC as receiver of the failed institutions.

No losses to the FDIC, finally some good news for the taxpayer. Although how there will be no losses absorbed by the insurance fund is a wonderful question. Details about the plan are not plentiful at this point.

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