(Reuters) - U.S. bank regulators filed court papers this week seeking dismissal of a Texas lawsuit that claims JPMorgan Chase & Co (JPM.N) tried to gain an unfair advantage in its $1.9 billion purchase of Washington Mutual Inc's (WAMUQ.PK) bank last year.
In documents filed on Monday in federal court in Galveston, Texas, the Federal Deposit Insurance Corp said the WaMu stakeholders who brought the lawsuit are trying to circumvent the FDIC claims process, and that the suit should be dismissed or moved to a court in Washington D.C.
WaMu collapsed last year, in the largest U.S. bank failure in history. The bank was seized by U.S. bank regulators on September 25 and the FDIC immediately sold its deposits to JPMorgan. The surviving holding company filed for bankruptcy protection a day later.
However, the stakeholders' lawsuit filed in February claims that Washington Mutual's crown jewels were sold to JPMorgan at a fire-sale price that did not properly compensate WaMu's investors. They also claim that JPMorgan acted improperly ahead of the sale by leaking false and harmful information from WaMu's financial records, in an attempt to deflate its value and purchase WaMu's assets on the cheap, according to court papers.
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Tuesday, May 12, 2009
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