Elliot Greenleaf was selected as Special Litigation and Conflicts Counsel to Washington Mutual, Inc. and WMI Investment Corp. Washington Mutual, Inc. was a savings bank holding company and the former owner of Washington Mutual Bank, which was the United States’ largest savings and loan association.
On September 25, 2008, the United States Office of Thrift Supervision (OTS) seized Washington Mutual Bank from Washington Mutual, Inc. and placed it into the receivership of the Federal Deposit Insurance Corporation (FDIC). The OTS took the action due to the withdrawal of $16.4 billion in deposits, during a 10-day bank run (amounting to 9% of the deposits it had held on June 30, 2008). The FDIC sold the banking subsidiaries (minus unsecured debt or equity claims) to JPMorgan Chase Bank, N.A. (JPMC) for $1.9 billion, which reopened the bank’s offices the next day as JPMC branches. The next day, September 26, Washington Mutual, Inc. the bank’s holding company and related subsidiaries filed for Chapter 11 voluntary bankruptcy in Delaware, where it is incorporated.
Washington Mutual Bank’s closure and receivership is the largest bank failure in American financial history. Before the receivership action, it was the sixth-largest bank in the United States. According to Washington Mutual Inc.’s 2007 SEC filing, the holding company held assets valued at $327.9 billion.
On March 24, 2009 JPMC filed an adversary proceeding against the Debtors, concerning the proper ownership of specific Washington Mutual Bank assets that JMPC alleges to have acquired from the FDIC.
On April 27, 2009, the Debtors commenced a separate adversary proceeding against JPMC, concerning $4 billion in deposit liabilities that JPMC owes the Debtors but refuses to pay. Elliott Greenleaf and Quinn Emanuel Urquhart Oliver & Hedges, LLP were retained as special litigation to the Debtor for these matters.
The case is currently pending summary judgment in the bankruptcy case and multiple appeals to both the District Court and Third Circuit Court of Appeals have been filed.
Elliott Greenleaf was selected based on the Firm’s experience as litigation counsel in Delaware. Managing Shareholder of the Firm’s Delaware office, Rafael Zahralddin, and Counsel Neil Lapinski and Shelley Kinsella are leading the Firm’s efforts in this important matter.