> http://research-investigations.newsvine.com/_news/2009/03/30/2618533-...
> By: John E. Fiorentino

> On March 20, 2009 Washington Mutual's holding company filed suit
> against the FDIC for over 13 billion dollars. The suit contends that
> the fire-sale of the bank's assets to JPMorgan Chase was a violation
> of its rights.

> In its suit lawyers for the bank's holding company Washington Mutual
> Inc. contend that the bank was worth more than the $1.9 billion
> JPMorgan paid for it in a deal arranged by the FDIC. The lawsuit
> argues that if WaMu's assets had been liquidated prudently, they would
> have been worth more than that.

> On March 24, 2009 JPMorgan Chase countersued Washington Mutual in the
> U.S. bankruptcy court in Delaware. JPMorgan urged the federal
> bankruptcy court not to interfere with its September purchase of the
> thrift's banking operations.

> In another article I wrote entitled; "The plunder of Washington
> Mutual" I outlined some of the rather burning questions relating to
> the seizure of that institution by the federal authorities.

> Many questions of propriety remain regarding the seizure of WaMu and
> the exact role played by JPMorgan Chase.

> Could it be that the infamous Chairman and CEO of JPMorgan, Jamie
> Dimon - who always seems to be in the right place at the right time -
> has succeeded in biting off more than even he can chew?

> Dimon - always the spin-doctor - may this time find himself twisting
> in the wind.

> In their countersuit, filed in the US Bankruptcy Court in Delaware
> (where the WaMu bankruptcy is being handled); JPM indicates it "sued
> to ensure that it does not lose any of its interests in Washington
> Mutual's banking operations, which it said it bought in good faith. It
> also wants to be reimbursed for various claims it might face over the
> purchase."

> JPM also stated: "Protection of the title conveyed by the FDIC to
> institutions like JPMorgan Chase, who are encouraged to step into the
> breach and provide the stability and continuity necessary to avert a
> run on a failing bank and disruption of its services to the public, is
> critical to the ability of the regulators to manage bank failures,"
> The bank also said Washington Mutual's failure came at no cost to the
> FDIC insurance fund, while the July 2008 failure of IndyMac Bancorp
> Inc. a California thrift one-tenth the size of Washington Mutual, cost
> the FDIC $10.7 billion.

> The issue of "good faith" in this instance is certainly one worth
> investigating. There are more than mere indications that JPM was given
> a head start in the "bidding" process for WaMu. A process about which
> the FDIC has still not seen fit to openly discuss.

> As to whether or not JPM did indeed "step into the breach" or whether
> it actually stepped in something else still remains to be seen. And
> whether or not the WaMu seizure came "at no cost" to the FDIC is
> irrelevant. Either this seizure was conducted properly or it wasn't.
> That is the relevant issue.

> The facts seem to indicate that all of the concerned parties spoke
> with forked tongues at one point or another. The FDIC, the Office of
> Thrift Supervision (OTS), and JPM were all seemingly unable to get on
> the same page.

> Dimon's D-Day

> The bankruptcy court in the WMI case has set March 31 as the Bar date.
> (The date by which the court must receive proofs of claim) JPM filed a
> motion objecting to the Bar date. In its motion, JPM stated among
> other things: "JPMorgan Chase needs more time than afforded by the
> proposed deadline to continue its ongoing efforts to understand and
> evaluate the claims and assets it has acquired from the FDIC in its
> capacity as receiver for WMB."

> In other words, Dimon has no idea what it is he actually purchased
> from the FDIC, nor can he properly place a value on the total assets
> and liabilities of the deal. In spite of all that, Dimon in a January
> 15, 2009 conference call seemed confident enough to offer guidance on
> the impact of the WaMu transaction on the balance sheets of JPM.

> One thing is painfully obvious. Either JPM knows what it acquired from
> FDIC or it doesn't. If it does, then one must question the points
> raised in its objection to the bankruptcy court. If it doesn't
> actually know what it purchased, then one must question how it can
> offer guidance as to what the impact of the WaMu transaction will have
> on its balance sheets.

> In any event, Mr. Dimon has another appointment with adversity as JPM
> is scheduled to release its Q1 earnings on April 16.

> Perhaps you're wondering why we simply don't look at the Purchase and
> Assumption agreement between the FDIC and JPM to get some handle on
> just what it was JPM purchased. It's certainly a reasonable request to
> do so. However, when we do that, we are still left in the dark.

> In "ARTICLE III PURCHASE OF ASSETS" we are told: The
> subsidiaries, joint ventures, partnerships, and any and all other
> business combinations or arrangements, whether active, inactive,
> dissolved or terminated being purchased by the Assuming Bank includes,
> but is not limited to, the entities listed on Schedule 3.1a.

> Unfortunately, the FDIC indicates that no 3.1a document exists.

> Where is the Media?

> You might be asking yourself where the media is in all of this.
> Certainly that is another good and fair question.

> Just where is the touted David Faber of CNBC fame? Perhaps he still
> has his head in the sand, as he's had since WaMu's seizure - yes,
> since the last time he hung up on me as I started my investigation
> into the circumstances surrounding the government's actions. Do we
> hear nary a peep from the financial news mega cheerleaders and talking
> heads? Personally, I would just like a nickel for every time Maria
> Bartiromo chirps "AIG" or "Google."

> And where you might ask is Jim Cramer -- who is the host of CNBC's
> "Mad Money" -- last seen making his contribution to the truth by
> referring to investors in Washington Mutual stock as "clowns."

> Whatever the final result of all of the obfuscation in this case --
> one thing is certain -- we need a fair and unbiased investigation into
> the circumstances surrounding the seizure of WaMu.

> Shares of the once mighty thrifts holding company still trade, albeit
> on the "Pink Sheets" under the symbol WAMUQ.

> Bets, anyone?