Judge Greenlights WaMu Deal With Warrant Holders

Law360, Wilmington (February 1, 2012, 4:24 PM EST) -- A Delaware bankruptcy judge on Wednesday cleared Washington Mutual Inc. to settle a long-running feud with a class of investors in the defunct bank’s litigation tracking warrants, releasing $337 million to pay back creditors that was held in reserve during the dispute.

The investors had fought to be treated as creditors under WaMu’s reorganization plan, but U.S. Bankruptcy Judge Mary F. Walrath ruled in January that the warrants were equity instead, slashing the investors’ expected recovery.

Under the settlement, the LTW-holders agreed to drop an appeal...
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