Dollars and Jens
Saturday, September 27, 2008
Washington Mutual falls
I'm more and more starting to agree that Washington Mutual was seized and sold, if not prematurely, in a manner unfair to some of its creditors. If JP Morgan had bought the operations for this price without OTS/FDIC involvement, I'd think you have pretty strong grounds for calling the conveyance constructively fraudulent: they were surely worth more than the price that was paid. The strongest defense OTS/FDIC have is that they apparently did have an auction with multiple bidders, though they seem reluctant to make public the terms of the other bids. They may, in fact, have made what otherwise would have been FDIC claims against WM effectively senior to debt with which it should have been pari passu.


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