Bankruptcy judge approves WaMu reorganization

After three years of legal battles a bankruptcy judge has given Washington Mutual permission to exit reorganization.

The $7 billion reorganization will allow the savings and loan giant to begin paying of creditors and includes significant distributions to shareholders. Two previous reorganization plans were rejected by a federal bankruptcy judge in Delaware.

Today’s approval came after a group of creditors known as the TPS Consortium agreed to change their vote and support the proposal, according to Bloomberg.

WaMu entered bankruptcy three years ago after aggressively selling subprime and other high-risk loans which eventually led to housing market crash and triggered the financial collapse.

WaMu was the largest bank failure in U.S history with 2,200 branches holding $188 billion in deposits. The Federal bank regulators closed WaMu and sold them to JP Morgan Chase.  

Bankruptcy is inevitable for some companies that have taken too many risks or overextended their credit. A bankruptcy attorney will offer their advice to ailing business and detail their options for shedding their debt burdens.

Bankruptcy lawyers understand that each filing is dependent on how many assets a business holds and how much debt they carry. 

After a detailed evaluation of a business’s financials, a bankruptcy attorney can determine which debt plan is most appropriate. Some bankruptcy structures allow a company to continue operations while they organize. Other bankruptcy filings require a business sell off assets in order to pay down debts.