Sale of WMB Assets
Dissipation of WMB's Assets by the FDIC
- WMI is claiming that the FDIC did not liquidate the assets of WMB in a reasonable manner and is seeking compensation equal to the "difference between what [WMI] would have received in a straight liquidation of WMB and what they actually received [0]" [WMIvFDIC]
- WMI states that the "FDI Act requires 'the Corporation [to] conduct its operations in a manner which ... maximizes the net present value return from the sale or disposition of such assets...' 12 U.S.C. Sec. 1821(d)(13)(E)(i)." [WMIvFDIC].
Tailoring of the Auction for JPM
- The FDIC modified the standard indemnification in the Whole Bank P&A “to indemnify JPM for 500 million to protect against litigation ‘for violation of the agreement between WMI and JPMorgan Chase dated March 11, 2008.” [BK 1997, p10]
- The FDIC agreed to override certain state banking laws that would otherwise prohibit JPMC from acquiring certain WMB branches [BK 1997, p695].
- The FDIC “waive[d] restriction contained in paragraph 32 of Robinson Resolution...” that limits this procedure “...to institutions with assets less than 1 billion...” [BK 1997, p696].
Fifth Amendment Taking
- WMI is asserting that the failure to compensate WMI justly for the assets of WMB constitutes a violation of the Fifth Amendment to the US Constitution [WMIvFDIC].
Accounting of Receivership
- WMI is also seeking an accounting of the receivership, including a list of all property transferred from WMI in conjuction with the receivership and all property disposed by the receivership [WMIvFDIC].
References