Washington Mutual Inc WAMUQ.PK said on Friday it has won court approval to send its latest reorganization plan to creditors for a vote, and hopes to end its nearly 3-1/2-year-old bankruptcy by the end of February.
Once the largest U.S. savings and loan, Washington Mutual expects to distribute more than $7 billion to creditors after it emerges from Chapter 11. A hearing to confirm its reorganization plan is scheduled to begin on February 16.
Washington Mutual won permission to send its plan to creditors when U.S. Bankruptcy Judge Mary Walrath in Wilmington, Delaware, this week approved its so-called disclosure statement.
That statement is designed to provide adequate information to help creditors decide whether to vote for or against the accompanying plan.
Some creditors sought to delay approval of the disclosure statement, so they could appeal to another judge a ruling concerning their claims to about $1.5 billion of preferred securities.
Walrath had rejected two prior versions of Washington Mutual's reorganization plan. About 4,000 claims have been filed in the Chapter 11 case, a court filing shows.
Based in Seattle, Washington Mutual once had $307 billion of assets. It remains the largest U.S. bank or thrift to fail.
The FDIC seized the lender on September 25, 2008, and arranged the sale of its main banking operations that day to JPMorgan Chase & Co (JPM.N) for $1.88 billion. Washington Mutual's holding company filed for bankruptcy protection the next day.
The case is In re: Washington Mutual Inc, U.S. Bankruptcy Court, District of Delaware, No. 08-12229.
(Reporting by Jonathan Stempel in New York; Editing by Gerald E. McCormick)