Is Chase Squatting in Ex-WaMu Branches?

Maybe our "brazen squatters" in Magnolia and Kirkland are simply adopting best practices. Almost two years ago, in late September 2008, federal bank regulators seized Washington Mutual and sold it to JPMorgan Chase & Co. for $1.9 billion. All around Seattle the WaMu signs came down and Chase signs went up.

Now a WaMu shareholder, armed with a FOIA, claims to have a document showing the deal has yet to reach a final settlement. The PSBJ reports:

Lam noticed that on pages 7 and 9, the original WaMu purchase and sale agreement allows the FDIC to extend the settlement date. He says he asked about it, and the FDIC confirmed in phone calls and emails that the settlement date was set for Aug. 30, 2010, and could be extended further.

The PSBJ's Al Scott called the FDIC and JP Morgan Chase for comment, only to be told they were "looking into it." [Ed: I'll be downtown later this afternoon putting up TSB signage on Chase branches, since there's apparently some confusion about when Chase bought WaMu and when they knew they'd bought it. The market rewards nimbleness!]

At the time of the sale, WaMu had assets of $307 billion and deposits of $188 billion, so the $1.9 billion "sale" price represented a remarkable bargain for JP Morgan Chase, who took over WaMu's assets while WaMu shareholders' claims were wiped out by bankruptcy. Those shareholders have been waging a battle ever since, to reclaim at least part of their investment.

The FDIC's Sheila Bair justified the seizure and sale, commenting: "I was worried. We needed to protect the depositors and the taxpayers," but "[l]awyers for multiple groups of investors and lawyers for WaMu's former parent company, Washington Mutual Inc., have also conducted investigations and found enough to file lawsuits claiming everything from market manipulation to mismanagement," reports the Wall Street Journal, in detailing the news of a probe into WaMu's demise, as part of bankruptcy proceedings.

Elsewhere the WSJ notes that, "J.P. Morgan's multi-family lending business got a boost with the acquisition of failed Washington Mutual Inc. in 2008. Those have been among the best performing WaMu loans on the bank's books."