Federal bankruptcy watchdogs named Joshua R. Hochberg Monday to investigate a proposed settlement of billions of dollars worth of legal claims stemming from the September 2008 seizure and sale of Washington Mutual Bank.
Hochberg, a lawyer at McKenna Long & Aldridge in Washington, was the court-appointed examiner in the case of failed commodities broker Refco Inc.
A bankruptcy judge last week authorized the investigation after the former bank's parent, Washington Mutual Inc., agreed that an outside view is in order.
Washington Mutual filed for Chapter 11 protection after losing Wamu, and it wants to settle its claims against regulators and against JPMorgan Chase & Co., which bought the thrift for $1.9 billion.
The proposed settlement is the foundation for Washington Mutual's Chapter 11 plan, which would leave the former bank holding company about $7 billion to distribute to creditors. That is not enough pay anything to shareholders, who rank at the bottom of Washington Mutual's creditors. They oppose the pact, insisting that the wrongs done to the parent entitle them to a recovery. Hochberg has been asked to give a preliminary report by Sept. 7.
