WASHINGTON — A judge has given the Federal Deposit Insurance Corp. and former executives at Washington Mutual Bank until yearend to settle civil charges related to the thrift's 2008 failure, raising the likelihood of an out-of-court resolution.

It had been reported earlier this year that the parties, including former Wamu chief executive officer Kerry Killinger, had entered settlement talks but that those talks had not produced an outcome. But a recent filing by Marsha J. Pechman, a U.S. District Court judge in Seattle, indicates the sides are now closer to resolving the dispute. Details of a settlement were not disclosed.

"The court has been notified by the parties of a pending settlement of this case," Pechman wrote in an Oct. 27 order. She granted the parties 60 days to "perfect their settlement." Separate pending motions by the defendants to dismiss the case were also terminated. Pechman added that the 60-day deadline could be extended if the parties showed "good cause."

In March, the FDIC sued the three senior executives of the Seattle lender, which also included former chief operating officer Stephen Rotella and mortgage division head David Schneider, for damages potentially exceeding $900 million. The agency, which has sued numerous failed-bank managers for alleged roles in bank collapses, charged the Wamu executives had taken undue risks in carrying out the thrift's lending strategy. The September 2008 failure was the largest bank closure ever.

The suit also named both Killinger and Rotella's wives, alleging they had helped in the improper transfer of certain assets before and after Wamu's failure.

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