JPM Sues FDIC Over WaMu Claims
JPMorgan Chase (JPM) has sued the Federal Deposit Insurance Corp. over Washington Mutual's legal liabilities, the Wall Street Journal reported Tuesday.
The complaint, filed in U.S. District Court for the District of Columbia, is not yet available through the court's website. However, it alleges that the FDIC has failed to uphold an obligation to absorb legal claims against Washington Mutual, which was seized and transferred to JPMorgan in 2008, according to the Journal.
The question of who is responsible for its liabilities was a secondary concern at the time of WaMu's failure but has became the subject of a major dispute between JPM and the FDIC, with billions of dollars of legal claims potentially hanging in the balance. Although the FDIC stated at the time that it would not absorb any losses related to WaMu's failure, that actual language within the contract left the issue vague.
JPMorgan's suit does not challenge the terms of its recent $13 billion mortgage settlement, under which it agreed not to pursue certain claims against the FDIC. Instead, it demands that the insurance fund cover additional claims in an amount lower than the $2.7 billion remaining in the FDIC receivership pleas that liquidated WaMu, the Journal says.