By Gerri Elder
Washington Mutual Inc. (WaMu) filed for Chapter 11 bankruptcy on September 24; one day after federal regulators seized its banking operations. The banking operations were sold to JPMorgan Chase, according to the Seattle Times. The fall of WaMu marks the largest bank failure in the country, so far. In bankruptcy documents that were filed in Delaware, WaMu listed more than $8 billion in total debts. On September 23, the Federal Deposit Insurance Corp took over WaMu's main assets but left the shell company untouched, allowing it to survive as a holding company. Account holders at WaMu will not be affected by the bankruptcy because JPMorgan has acquired the banking operation; however, bondholders and other creditors will have to duke it out for whatever assets the company has left.
Lehman Brothers Holdings withdrew its September 17, 2008 motion for an order authorizing it to obtain $450 million in post-petition financing and to grant liens and super-priority claims to post-petition lenders from U.S. Bankruptcy Court consideration. The official committee of unsecured creditors filed a motion to have the bankruptcy court reconsider its interim approval to the company's financing motion, saying that after the interim order was issued, events transpired that rendered the Senior Secured Superpriority Debtor in Possession Credit Agreement no longer in the best interests of Lehman Brothers Holdings' estate. According to BankruptcyData.com, the informal noteholder group and the Pension Benefit Guaranty Corporation also filed separate limited objections to the company's financing motion.
Financing reconsideration for Luminent Mortgage Capital was approved by the U.S. Bankruptcy Court. Luminent had filed an emergency motion to reconsider after the bankruptcy court issued an order denying its motion to authorize it to obtain post-petition, secured, super-priority financing. According to MortgageBankers.org, Luminent also filed a separate emergency motion seeking a declaration that an event of default has not occurred under the post-petition loan and security agreement between the company and Arco Capital Corporation.
Paper International was considering filing bankruptcy and now has filed for Chapter 11 bankruptcy, according to a Reuters news report. The company, which is wholly-owned by Corporacion Durango, has faced huge challenges over the past year, stemming mainly from an unexpected and sustained rise in global energy prices. The company is currently operating under voluntary insolvency proceedings in Mexico.