UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  July 28, 2010
 
WASHINGTON MUTUAL, INC.
(Exact name of registrant as specified in its charter)
 
Commission File Number:  1-14667
 
WASHINGTON
91-1653725
(State or other jurisdiction of
(IRS Employer
incorporation)
Identification No.)
 
925 FOURTH AVENUE, SUITE 2500
SEATTLE, WASHINGTON 98104
(Address of principal executive offices, including zip code)
 
(206) 432-8887
(Registrant’s telephone number, including area code)
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 
 
 

Item 7.01  Regulation FD Disclosure.
 
On July 28, 2010, Washington Mutual, Inc. (the “ Company ”) and WMI Investment Corp. (together with the Company, the “ Debtors ”) filed their monthly operating report for the period June 1, 2010 to June 30, 2010 (the “ Monthly Operating Report ”) with the United States Bankruptcy Court for the District of Delaware (the “ Court ”) (Case Number 08-12229 (MFW)). The Monthly Operating Report is attached hereto as Exhibit 99.1 and is incorporated herein by reference. This Current Report (including the exhibit hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely by Regulation FD.
 
The Monthly Operating Report may be available electronically, on the internet website of the Debtors’ claims agent, Kurtzman Carson Consultants, LLC, at http://www.kccllc.net/.
 
Limitation on Incorporation by Reference
 
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
 
Cautionary Statement Regarding Financial and Operating Data
 
The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Company. The Monthly Operating Report is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the operating guidelines as described in the Chapter 11 Trustee Handbook, United States Department of Justice, May 2004 in accordance with 28 U.S.C. § 586(a)(3). The Monthly Operating Report was not audited or reviewed by independent accountants, was not prepared in accordance with Generally Accepted Accounting Principles in the United States, is in a format prescribed by applicable bankruptcy laws, and is subject to future adjustment and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in the Company’s securities, the Monthly Operating Report is complete. The Monthly Operating Report also contains information for periods which are shorter or otherwise different from those required in the Company’s reports pursuant to the Exchange Act, and such information might not be indicative of the Company’s financial condition or operating results for the period that would be reflected in the Company’s financial statements or in its reports pursuant to the Exchange Act. Results set forth in the Monthly Operating Report should not be viewed as indicative of future results.
 
Cautionary Statement Regarding Forward-Looking Statements
 
The Current Report on Form 8-K and the exhibit hereto contain certain statements that may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the Company’s current plans, expectations, estimates and management’s beliefs about the Company’s future performance. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties that are difficult to predict and which may cause the Company’s actual results and performance to differ materially from those expressed or forecasted in any such forward-looking statements. Some of these risks and uncertainties are discussed in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2007 under “Factors that May Affect Future Results.” These risks include, among other factors, changes in business, economic and market conditions, changes in government regulation, and changes in the competitive environment in which the Company operates. Other risks that the Company faces include, but are not limited to, the following: (i) the Company’s ability to obtain Court approval with respect to motions in the
 

 
 
 

Debtors’ chapter 11 proceedings prosecuted by the Debtors from time to time; (ii) risks associated with third parties seeking and obtaining Court approval to convert the Debtors’ chapter 11 cases to cases under chapter 7 of the bankruptcy code; and (iii) the potential adverse impact of the Debtors’ chapter 11 cases on the Debtors’ liquidity or results of operations. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements. However, readers should carefully review the statements set forth in the reports, which the Company files from time to time with the Securities and Exchange Commission, particularly its Current Reports on Form 8-K.
 

Item 9.01  Financial Statements and Exhibits.

(d) Exhibits
 
Exhibit No.
 
 
Description
 
EX-99.1
 
Monthly Operating Report for the period June 1, 2010 to June 30, 2010, filed with the United States Bankruptcy Court for the District of Delaware.
 

 
 
 
 

 

 
 
 


 

 
Signature(s)
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
  WASHINGTON MUTUAL, INC.  
       
Date:  July 28, 2010
By:
/s/  John Maciel  
    John Maciel  
    Chief Financial Officer  

 
 

 
EXHIBIT 99.1
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
 
In re Washington Mutual, Inc., et al.
Case No. 08-12229 (MFW)
 
Reporting Period: 06-01-10 to 06-30-10
   
MONTHLY OPERATING REPORT
 
REQUIRED DOCUMENTS
Form No.
Document
Attached
Explanation
Attached
Schedule of Cash Receipts and Disbursements
MOR-1
Yes
 
Bank Reconciliation (or copies of Debtors’ bank reconciliations)
MOR-1a
Refer to attached stmt
 
Schedule of Professional Fees Paid
MOR-1b
Yes
 
Copies of bank statements
MOR-1c
Refer to attached stmt
 
Cash disbursements journals
 
n/a
Refer to MOR 1 for summary of all disbursements.
Statement of Operations
MOR-2
Yes
See attached notes
Balance Sheet
MOR-3
Yes
See attached notes
Status of Post petition Taxes
MOR-4
Yes
 
Copies of IRS Form 6123 or payment receipt
 
n/a
Payroll services outsourced including remission of taxes
Copies of tax returns filed during reporting period
 
n/a
See listing of filings
Summary of Unpaid Post petition Debts
MOR-4
n/a
Detail on face of balance sheet.
Listing of aged accounts payable
MOR-4
Yes
 
Accounts Receivable Reconciliation and Aging
MOR-5
n/a
No trade receivables
Debtor Questionnaire
MOR-5
Yes
 

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the documents attached are true and correct to the best of my knowledge and belief.
 
     
 /s/ John Maciel
 
July 28, 2010
Signature of Authorized Individual*
 
Date
     
John Maciel
 
Chief Financial Officer
Printed Name of Authorized Individual
 
Title of Authorized Individual
     

*Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.




 
 
 
In re Washington Mutual, Inc., et al
Case No. 08-12229 (MFW)
 


DISCLAIMER
 

Washington Mutual, Inc. (“WMI”) and WMI Investment Corp. (together, the “Debtors”) caution investors and potential investors in WMI not to place undue reliance upon the information contained in this Monthly Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of WMI. The Monthly Operating Report is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly operating guidelines as described in the Chapter 11 Trustee Handbook, United States Department of Justice, May 2004 in accordance with 28 U.S.C §586(a)(3). The Monthly Operating Report was not audited or reviewed by independent accountants; does not purport to present the financial statements of WMI in accordance with generally accepted accounting principles; does not purport to present the market value of WMI’s assets and liabilities or the recoverability of WMI’s assets; is in a format prescribed by applicable bankruptcy laws; and is subject to future adjustment and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in WMI’s securities, the Monthly Operating Report is complete. Results set forth in the Monthly Operating Report should not be viewed as indicative of future results. This disclaimer applies to all information contained herein.

On September 26, 2008 (the “Petition Date”), the Debtors each commenced voluntary cases under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). Prior to the Petition Date, on September 25, 2008, the Director of the Office of Thrift Supervision, appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver for Washington Mutual Bank (“WMB”) and advised that the receiver was immediately taking possession of WMB’s assets. Immediately after its appointment as receiver, the FDIC sold substantially all the assets of WMB, including the stock of Washington Mutual Bank fsb, to JPMorgan Chase Bank, National Association (“JPMorgan”) pursuant to that certain Purchase and Assumption Agreement, Whole Bank, dated as of September 25, 2008 (the “Sale”).

Prior to the Petition Date, WMI and WMB jointly maintained their respective financial records. As a result of the Sale, many of the Debtors’ books and records were seized by the FDIC and transferred to the custody of JPMorgan. Accordingly, the Debtors are not in control of certain information relating to their operations and financial affairs, including, but not limited to, certain accounting information. In addition, as of the date of the Sale, substantially all of WMB’s employees became employees of JPMorgan. Accordingly, this Monthly Operating Report was prepared, in part, based upon the information and work product and/or representations made available to the Debtors and their professionals by representatives of WMB and JPMorgan.

Results represented in this Monthly Operating Report are consistent with WMI’s accounting practices as of the Petition Date. However, records of prepetition assets and liabilities, including, among other things, liabilities owed by WMI to WMB and its affiliates are likely to be adjusted. Further, claims have been filed against the Debtors in their chapter 11 cases that are not currently recorded on WMI’s books that, if allowed, would change the reported balances for pre-petition liabilities. The Debtors reserve all rights to amend the results represented in this Monthly Operating Report.


 
 
 

Washington Mutual, Inc., et al.
 
June 2010 Monthly Operating Report -- UNAUDITED
Case No. 08-12229 (MFW)
MOR 1 -- Schedule of Cash Receipts and Disbursements
 

 
Washington Mutual, Inc.
WMI Investment Corp.
 
Account
Deposit
Deposit
Deposit
Deposit
Money Market
General
 
Deposit
General
   
Bank
WMB/JPM
WMB/JPM
WMB/JPM
WMB/JPM
Bank of America
Bank of America
 
WMB/JPM
Bank of America
   
Bank Account
xxx0667
xxx4234
xxx9626
xxx9663
xxx0658
xxx4228
WMI
xxx4704
xxx4231
WMI Inv Corp
Combined
GL Account
70 /10450
70 / 10441
70 / 10451
70 / 10452
70 / 12510
70 /10305
Total
467 / 10450
467 / 10305
Total
Total
                       
Opening Balance - 05/31/2010
262,035,508
3,677,876,231
 4,660
 749,789
4,951,348
 4,874,780
3,950,492,316
 53,631,130
 52,785
53,683,915
 4,004,176,231
                       
Receipts
                     
                       
Interest & investment returns
 40,047
 562,090
-
 115
 2,682
235,617
 840,550
 8,197
 148,912
 157,109
 997,658
Tax refunds
         
 23,903
 23,903
   
-
 23,903
Reimbursements/distributions from subs
         
-
-
   
-
-
Sales of assets/securities
         
-
-
   
-
-
Other miscellaneous receipts
         
 4,964
 4,964
   
-
 4,964
Total Receipts
 40,047
 562,090
-
 115
 2,682
 264,484
869,417
 8,197
 148,912
 157,109
1,026,526
                       
                       
Transfers
                     
                       
Sweep to/(from) Money Market account
       
(4,000,000)
 4,000,000
-
 
-
-
-
Transfer (to)/from Wells Managed Account
       
 23,000,000
 2,000,000
 25,000,000
 
-
-
 25,000,000
Total Transfers
-
-
-
-
19,000,000
 6,000,000
 25,000,000
-
-
-
 25,000,000
                       
                       
Disbursements
                     
                       
Salaries and benefits
         
 294,428
 294,428
-
-
-
 294,428
Travel and other expenses
         
 15,191
 15,191
-
-
-
 15,191
Occupancy and supplies
         
109,978
109,978
-
-
-
109,978
Professional fees
         
6,988,261
6,988,261
-
-
-
6,988,261
Other outside services
         
 624,929
 624,929
-
-
-
 624,929
Bank fees
         
21,579
21,579
-
-
-
21,579
US Trustee quarterly Fees
         
-
-
-
-
-
-
Directors fees
         
 60,000
 60,000
-
-
-
 60,000
Taxes paid
         
-
-
-
-
-
-
Total Disbursements
-
-
-
-
 
 8,114,365
 8,114,365
-
-
-
 8,114,365
                       
Net Cash Flow
 40,047
 562,090
-
 115
19,002,682
 (1,849,881)
17,755,052
 8,197
 148,912
 157,109
 17,912,160
                       
Cash - End of Month
262,075,555
3,678,438,321
 4,660
 749,904
 23,954,030
 3,024,899
 3,968,247,368
 53,639,327
201,697
53,841,024
4,022,088,391
                       
GL Balance
262,075,555
3,678,438,321
 4,660
 749,904
 23,954,030
 3,024,899
 3,968,247,368
 53,639,327
201,697
53,841,023
4,022,088,391
                       
Net value - short-term securities
           
 588,371,469
   
221,719,412
 810,090,882
                       
Total Cash & Cash Equivalents
           
4,556,618,837
   
275,560,435
4,832,179,273



 
 
 

In re Washington Mutual, Inc., et al
Case No. 08-12229 (MFW)
 

June 2010 Monthly Operating Report -- UNAUDITED
MOR 1a and MOR 1c -- Cash



Bank Reconciliations

The above-captioned debtors (the "Debtors") hereby submit this attestation regarding bank account reconciliations in lieu of providing copies of bank statements and copies of all account reconciliations.

I attest that each of the Debtors’ bank accounts is reconciled to monthly bank statements except those certain accounts ending in 0667, 9626, 9663 and 4704 (the “Excluded Accounts”). The Debtors’ standard practice is to ensure that each bank account is reconciled to monthly bank statements for each calendar month 30 days after month end.

In May 2009, JPMorgan started transitioning bank accounts from the WMB deposit platform to the JPMorgan deposit platform. Since the transition, JPMorgan has only provided the Debtors with bank account statements for certain months. The Debtors have not received bank statements for the period covered by this MOR for the Excluded Accounts. Therefore, the Debtors are unable to reconcile information related to the Excluded Accounts against a related bank statement. The Debtors have continued to record interest income on the accounts consistent with prior practice and based on an existing agreement with JPMorgan.



/s/John Maciel
 
John Maciel
 
Chief Financial Officer
 
Washington Mutual, Inc.
 


 
 
 


 
Case No. 08-12229 (MFW)
Washington Mutual, Inc., et al
 
MOR-1B: Schedule of Professional Fees Paid
 
Month Ended June 30, 2010
 

Washington Mutual, Inc.

       
Check
 
Amount Paid - Jun'10
   
Amount Paid CTD
 
Payee
 
Period Covered
 
Number
 
Date
 
Fees
   
Expense
   
Fees
   
Expense
 
                                     
Akin, Gump, Strauss, Hauer & Feld LLP
 
04/01/10 - 04/30/10
 
Wire
 
06/24/10
  $ 483,823.20     $ 30,264.87     $ 11,619,884.43     $ 353,239.39  
Alvarez & Marsal
 
05/01/10 - 05/31/10
 
Wire
 
06/17/10
    1,818,169.50       73,725.12       39,768,359.74       1,889,364.12  
Ashby & Geddes, P.A.
 
04/01/10 - 04/30/10
 
Wire
 
06/24/10
    57,536.80       9,908.59       86,396.40       13,730.39  
Blackstone Advisory Partners LLP
 
04/09/10 - 05/31/10
 
Wire
 
06/17/10
    850,000.00       -       1,350,000.00       -  
CONSOR Intellectual Asset Management
                -       -       255,318.00       3,249.00  
CP Energy Group, LLC
                -       -       91,347.88       159.47  
Davis Wright Tremaine LLP
                -       -       681,936.90       24,510.45  
Elliott Greenleaf
 
02/01/10 - 03/31/10
  2580, 2606  
06/10/10, 06/25/10
    47,591.20       10,571.09       627,508.45       43,327.54  
FTI Consulting, Inc.
 
04/01/10 - 04/30/10
 
Wire
 
06/24/10
    114,743.20       216.70       4,823,393.50       37,042.98  
Gibson, Dunn & Crutcher LLP
                -       -       680,607.25       12,423.11  
Grant Thornton
                -       -       427,981.00       36,836.68  
Joele Frank, Wilkinson Brimmer Katcher
 
05/01/10 - 05/31/10
  2582  
06/10/10
    11,518.13       2,513.78       176,053.76       16,610.72  
John W. Wolfe, P.S.
 
04/01/10 - 04/30/10
 
Wire
 
06/24/10
    182,991.20       2,306.93       1,902,632.70       4,898.56  
Kurtzman Carson Consultants LLC
 
05/01/10 - 05/31/10
 
Wire
 
06/17/10
    142,964.54       427,128.67       1,833,555.61       840,752.70  
McKee Nelson LLP / Bingham McCutchen LLP
                -       -       2,434,593.43       203,648.74  
Miller & Chevalier Chartered
 
03/01/10 - 03/31/10
 
Wire
 
06/10/10
    83,158.00       207.52       544,004.96       1,292.39  
Milliman
                -       -       29,697.49       -  
Pepper Hamilton LLP
 
02/01/10 - 02/28/10
 
Wire
 
06/24/10
    31,056.40       3,828.20       1,967,455.93       98,972.90  
Perkins Coie LLP
 
02/01/10 - 02/28/10
 
Wire
 
06/10/10
    32,656.80       1,702.62       1,622,494.34       73,519.38  
PricewaterhouseCoopers LLP
 
02/01/10 - 03/31/10
  2586  
06/10/10
    4,064.80       -       2,065,893.80       184,532.35  
Quinn Emanuel Urquhart Oliver & Hedges
                -       -       8,498,134.90       262,142.54  
Richards, Layton & Finger P.A.
                -       -       522,334.60       58,569.69  
Shearman & Sterling LLP
 
04/01/10 - 04/30/10
  2600  
06/17/10
    15,534.00       -       1,005,357.56       18,919.55  
Silverstein & Pomerantz, LLP
                -       -       14,826.00       77.53  
Simpson Thacher & Bartlett LLP
                -       -       459,603.85       11,045.33  
Towers Watson Pennsylvania Inc.
                -       -       354,901.43       -  
Venable LLP
 
01/11/10 - 04/30/10
 
Wire
 
06/24/10
    512,608.96       34,992.10       697,082.92       34,992.10  
Weil, Gotshal & Manges LLP
 
01/01/10 - 02/28/10
 
Wire
 
06/10/10
    1,911,943.40       90,534.86       20,851,269.30       546,684.16  
                                             
Total
              $ 6,300,360.13     $ 687,901.05     $ 105,392,626.13     $ 4,770,541.77  
 
WMI Investment Corp.
                                             
       
Check
 
Amount Paid - Jun'10
   
Amount Paid CTD
 
Payee
 
Period Covered
 
Number
 
Date
 
Fees
   
Expense
   
Fees
   
Expense
 
CP Energy Group, LLC
                -       -       22,000.00       42.77  
Goldman, Sachs & Co.
                -       -       300,000.00       -  
                                             
Total
              $ -     $ -     $ 322,000.00     $ 42.77  





 
 
 

Washington Mutual, Inc., et al.
Case No. 08-12229 (MFW)
June 2010 Monthly Operating Report -- UNAUDITED
 
MOR 2 Statement of Operations for the period 06/1/10 to 06/30/10
 


 
Washington Mutual, Inc.
 
WMI Investment Corp.
 
June 2010
 
Cumulative to Date
 
June 2010
 
Cumulative to Date
Revenues:
             
 
Interest income:
             
   
Cash equivalents
 742,648
 
 15,859,937
 
41,073
 
 834,610
   
Securities
 236,193
 
 5,451,433
 
 -
 
 2,976,201
   
Notes receivable - intercompany
48,480
 
 1,404,892
 
 -
 
1
   
Other
 155
 
 1,031,571
 
 -
 
 -
     
Total interest income
 1,027,476
 
 23,747,833
 
41,073
 
 3,810,813
 
Earnings (losses) from subsidiaries and other
             
   
equity investments
 (681,556)
 
 (178,493,446)
 
 (41,563)
 
 (5,579,278)
 
Gains (losses) from securities / investments
 5,072
 
(10,048,751)
 
 1,538
 
 (112,258,830)
 
Other income
 130,065
 
 3,920,577
 
 -
 
 (0)
     
Total revenues
 481,056
 
 (160,873,787)
 
 1,047
 
 (114,027,296)
                     
Operating expenses:
             
 
Compensation and benefits
 419,989
 
 9,093,801
 
 -
 
 -
 
Occupancy and equipment
78,017
 
 1,889,852
 
 -
 
 -
 
Professional fees
 748,004
 
 12,671,141
 
 -
 
 148
 
Loss / (Income) from BOLI/COLI policies
 (108,364)
 
 (7,877,261)
 
 -
 
 -
 
Management fees / Transition services Insurance
 187,500
 
 16,479,204
 
 -
 
 -
 
Other
 
 115,136
 
 2,975,506
 
14,036
 
 523,662
     
Total operating expenses
 1,440,282
 
 37,532,258
 
14,036
 
 523,811
                     
     
Net profit (loss) before other income and expenses
 (959,226)
 
 (198,406,044)
 
 (12,989)
 
 (114,551,107)
                     
Other income and expenses:
             
 
Interest expense:
             
   
Notes payable - intercompany
 -
 
 -
 
 -
 
 -
   
Borrowings
 -
 
 -
 
 -
 
 -
     
Total interest expense
 -
 
 -
 
 -
 
 -
 
Other expense / (income)
 -
 
(55,028,000)
 
 -
 
 -
                     
     
Net profit (loss) before reorganization items
 (959,226)
 
 (143,378,044)
 
 (12,989)
 
 (114,551,107)
                     
Reorganization items:
             
 
Professional fees
 7,812,941
 
120,205,646
 
 -
 
 322,043
 
Claims Adjustments
 -
 
 24,336,509
 
 -
 
 -
 
US Trustee quarterly fees
 -
 
 143,000
 
 -
 
11,375
 
Gains (losses) from sale of assets
 -
 
 -
 
 -
 
 -
 
Other reorganization expenses
 900,212
 
 10,268,456
 
 -
 
 -
     
Total reorganization items
 8,713,153
 
154,953,611
 
 -
 
 333,418
     
Net profit (loss) before income taxes
 (9,672,379)
 
 (298,331,656)
 
 (12,989)
 
 (114,884,525)
                     
Income taxes
 -
 
 4,050
 
 -
 
 -
                     
Net profit (loss)
 (9,672,379)
 
 (298,335,706)
 
 (12,989)
 
 (114,884,525)
                     
Income tax rate
0.0%
 
0.0%
 
0.0%
 
0.0%


 
 
 


Washington Mutual, Inc., et al.
Case No. 08-12229 (MFW)
June 2010 Monthly Operating Report -- UNAUDITED
 
MOR 3 Balance Sheet as of 06/30/2010 and 9/26/2008
 

 
Washington Mutual, Inc.
 
WMI Investment Corp.
 
6/30/2010
 
9/26/08
 
6/30/2010
 
9/26/08
Assets:
             
 
Unrestricted cash and cash equivalents
 4,556,618,837
 
 4,018,083,009
 
 275,560,435
 
 52,974,376
 
Restricted cash and cash equivalents
 95,721,922
 
 145,668,884
 
 -
 
 -
 
Investment securities
 67,097,301
 
 59,688,627
 
 -
 
 266,444,881
 
Accrued interest receivable
870,049
 
413,253
 
 4,997
 
4,084,658
 
Income tax receivable
 475,889,822
 
 742,680,150
 
 22,187,560
 
 22,187,560
 
Prepaid expenses
2,446,518
 
 11,311,510
 
 -
 
 -
 
Cash surrender value of BOLI/COLI
 44,556,807
 
 84,039,738
 
 -
 
 -
 
Funded Pension
 39,173,922
 
 638,870,071
 
 -
 
 -
 
Other investments
 -
 
 23,668,909
 
 57,853,931
 
 65,952,708
 
Investment in subsidiaries
 1,485,482,144
 
 1,895,218,467
 
 -
 
 -
 
Notes receivable - intercompany
 12,795,013
 
 58,001,133
 
 565,844,197
 
 565,844,197
 
Fixed Assets
 72,655
 
 -
 
 -
 
 -
 
Other assets
 98,091,272
 
 23,489,277
 
 -
 
 -
     
Total assets
 6,878,816,263
 
 7,701,133,028
 
 921,451,121
 
 977,488,380
                     
Liabilities not subject to compromise (Postpetition):
             
 
Accounts payable
7,149,583
 
 -
 
 -
 
 -
 
Accrued wages and benefits
800,170
 
 -
 
 -
 
 -
 
Other accrued liabilities
 16,711,497
 
 -
 
 14,825
 
 -
 
Minority interest
1,114,163
 
3,104,022
 
 -
 
 -
   
Total post-petition liabilities
 25,775,413
 
3,104,022
 
 14,825
 
 -
                     
Liabilities subject to compromise (Pre-petition):
             
 
Senior debt
 4,132,421,622
 
 4,126,545,947
 
 -
 
 -
 
Subordinated debt
 1,666,464,970
 
 1,662,295,485
 
 -
 
 -
 
Junior subordinated debt
 765,674,200
 
 752,445,436
       
 
Intercompany payables
 684,095,259
 
 684,095,258
 
 -
 
 -
 
Accounts payable
4,480,720
 
3,941,450
 
 -
 
 -
 
Taxes payable
 550,769,514
 
 550,080,833
 
 -
 
 -
 
Payroll and benefit accruals
 386,864,900
 
 407,215,221
 
 -
 
 -
 
Other accrued liabilities
 76,325,795
 
 92,259,015
 
 -
 
 -
 
Other pre-petition liabilities
 198
 
 223
 
 -
 
 -
   
Total pre-petition liabilities
 8,267,097,177
 
 8,278,878,868
 
 -
 
 -
                     
     
Total liabilities
 8,292,872,590
 
 8,281,982,890
 
 14,825
 
 -
                     
Shareholders' equity:
             
 
Preferred stock
 3,392,341,954
 
 3,392,341,953
 
 -
 
 -
 
Common stock
12,988,753,556
 
12,988,753,556
 
 1,000,000,000
 
 1,000,000,000
 
Other comprehensive income
(754,624,165)
 
(222,770,180)
 
 22,187,560
 
 (36,644,880)
 
Retained earnings - pre-petition
(16,742,191,966)
 
(16,739,175,191)
 
 14,133,260
 
 14,133,260
 
Retained earnings - post-petition
(298,335,706)
 
 -
 
(114,884,525)
 
 -
     
Total shareholders' equity
(1,414,056,327)
 
(580,849,862)
 
 921,436,296
 
 977,488,380
                     
     
Total liabilities and shareholder's equity
 6,878,816,263
 
 7,701,133,028
 
 921,451,121
 
 977,488,380


 
 
 

In re Washington Mutual, Inc., et al
Case No. 08-12229 (MFW)
 

NOTES TO MOR-2 and MOR-3

Note 1: Plan of Reorganization and Settlement Agreement

On March 26, 2010, the Debtors filed a proposed plan of reorganization pursuant to chapter 11 of the Bankruptcy Code and related disclosure statement, which were subsequently amended.

Most recently, on July 1, 2010, the Debtors filed their Fifth Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the Bankruptcy Code [D.I. 4850] (the “Plan”) and related Disclosure Statement [D.I. 4851] (the “Disclosure Statement”) with the Bankruptcy Court. The Plan is premised upon implementation of a Settlement Agreement (the “Settlement Agreement”), which represents a compromise of certain disputes among the Debtors, JPMorgan, the FDIC (as receiver for WMB and in its corporate capacity), the Creditors’ Committee and certain significant creditor constituencies. A hearing to consider approval of the Disclosure Statement is currently scheduled for September 7, 2010. The Bankruptcy Court has also established November 1, 2010 as the date for the hearing to consider confirmation of the Plan in accordance with section 1129 of the Bankruptcy Code.

The Settlement Agreement is an integral part of the Plan and is subject to final confirmation of the Plan. On the basis of the foregoing, the balance sheet and operating statement in this monthly operating report do not reflect any of the financial arrangements or settlements set forth in the Settlement Agreement.

The foregoing notwithstanding, aspects of the Plan are referred to in the Notes to MOR 2 and MOR 3 herein; however, users of this monthly operating report should refer to the Plan, Disclosure Statement, Settlement Agreement and related documents directly for complete information.

 
Note 2: Washington Mutual Preferred Funding
 

On September 25, 2008, the Office of Thrift Supervision concluded that an “Exchange Event” had occurred with respect to the following securities (the “Securities”):

·  
Washington Mutual Preferred Funding Trust I Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series I Perpetual Non-Cumulative Fixed-to-Floating Rate Preferred Stock of WMI);

·  
Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-cumulative Preferred Securities, Series A-1 (to be exchanged into depositary shares representing Series J Perpetual Non-Cumulative Fixed Rate Preferred Stock of Washington Mutual, Inc. (“WMI”));

·  
Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-cumulative Preferred Securities, Series A-2 (to be exchanged into depositary shares representing Series J Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI);

·  
Washington Mutual Preferred Funding Trust II Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series L Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI);

·  
Washington Mutual Preferred Funding Trust III Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series M Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI); and

·  
Washington Mutual Preferred Funding Trust IV Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series N Perpetual Non-Cumulative Fixed-to-Floating Rate Preferred Stock of WMI).


 
 
 


In accordance with the terms of the documents governing the Securities, the Conditional Exchange (as defined in the disclosure materials related to the Securities) of the Securities occurred on Friday, September 26, 2008 at 8:00 A.M. (New York time). The documentation governing the Securities contemplates that at the time of the Conditional Exchange, each outstanding Security was intended to be exchanged automatically for a like amount of newly issued Fixed Rate Depositary Shares or newly issued Fixed-to-Floating Rate Depositary Shares, as applicable, each representing a 1/1000th interest in one share of the applicable series of preferred stock of WMI. If and until such depositary receipts are delivered or in the event such depositary receipts are not delivered, any certificates previously representing Securities are deemed for all purposes, effective as of 8:00 AM (New York time) on September 26, 2008, to represent Fixed Rate Depositary Shares or Fixed-to-Floating Rate Depositary Shares, as applicable.

WMI and its advisors currently are assessing a number of legal, accounting and tax issues related to the Securities and the transactions related to the Conditional Exchange. Because of these unresolved issues, WMI has not yet reflected the Conditional Exchange and/or its attendant transactions on its financial statements, including any possible interests (direct or indirect, contingent or otherwise) in the Securities and the assets, as the case may be, of Washington Mutual Preferred Funding LLC.

Assuming that the Conditional Exchange had been completed in accordance with the terms of the relevant documentation, on a pro forma basis, WMI’s financial statements would reflect (a) a credit to shareholders’ equity of approximately $3.9 billion upon issuance of the new classes of preferred stock; (b) an investment in subsidiary (i.e. WMB) of approximately $3.9 billion upon contribution of the Preferred Securities by WMI to WMB; and (c) an immediate and corresponding write-down of such investment in subsidiary.

Pursuant to the terms of the Settlement Agreement, upon consummation of the Plan, WMI and relevant third parties will complete the Conditional Exchange.

Note 3: Restricted Cash and Cash Equivalents

WMI’s restricted cash and cash equivalents of $96 million includes $35 million of accumulated dividends related to amounts held in escrow pertaining to that certain action styled as American Savings Bank, F.A et al. v United States , Case No 92-872C pending in the United States Court of Federal Claims, $53 million in a deposit account pledged as collateral to secure prepetition intercompany transactions between WMI and WMB and $8 million held as part of a Rabbi Trust.

Pursuant to the terms of the Settlement Agreement, upon consummation of the Plan, WMI will take possession of the $53 million deposit account pledged as collateral for prepetition intercompany transactions with WMB, free and clear of any interest or liens asserted by JPMorgan.

Note 4: Investment in Subsidiaries

WMI’s investment in subsidiaries represents the book value of WMI’s subsidiaries, including WMI Investment. This balance does not represent the market value of these entities.

WMI subsidiaries hold unsecured notes receivable from WMB or JPMorgan, as the case may be, totaling approximately $180 million.

Pursuant to the terms of the Settlement Agreement, upon consummation of the Plan, JPMorgan will repay with interest the unsecured notes receivable to WMI subsidiaries.
 
Note 5: Funded Pension
 

The funded pension balance reflects the (1) the market value of assets as of December 2, 2008 less (2) the November 2008 actuarial estimated settlement value of September 25, 2008 liabilities. The value does not reflect any recent changes in market values, interest rate assumptions and the participants since November 2008 which could materially affect the results.

 
 
 

Pursuant to the terms of the Settlement Agreement, upon consummation of the Plan, WMI will transfer sponsorship of the pension plan to JPMorgan, including certain related assets, and JPMorgan will assume the pension plan liabilities.
 
Note 6: Taxes
 

The tax asset and liability balances are recorded consistent with WMI’s historical accounting practices as of the Petition Date and adjusted for refunds collected. Generally, tax related claims and payables are recorded on WMI’s books and records on a consolidated basis with the other members of the consolidated tax group and have not been adjusted for any potential claims against these assets. The current recorded balances do not reflect all expected refunds or payments as these amounts are currently being reviewed. The current estimate for the total expected refunds, net of potential payments, is in the range of approximately $2.7 - $3.0 billion (including interest but excluding tax refunds attributable to the Act, as described below). Various parties claim ownership rights to these refunds. As set forth in the Settlement Agreement, upon consummation of the Plan, WMI and JPMorgan will split the above-referenced net tax refunds 20%/80%, respectively (once received). Further, since the Petition Date, WMI has received approximately $250 million in tax refunds. These refunds are subject to the same allocation as referenced above.

On November 6, 2009, the Worker, Homeownership, and Business Assistance Act of 2009 (the “Act”) was enacted into law. The Act provides, in pertinent part, that corporate taxpayers, subject to certain limitations, may elect to extend the permitted Net Operating Loss (“NOL”) carryback period from two years to five years (with such taxpayers only receiving half this benefit in the fifth year). Pursuant thereto, WMI elected to carry back its 2008 NOL five years. WMI currently estimates an additional expected tax refund attributable to the Act of approximately $2.8 billion, including interest, as to which there are competing claims of ownership . As set forth in the Settlement Agreement, upon consummation of the Plan, WMI and the FDIC will split the tax refunds attributable to the Act (and actually received) 65.178%/34.822%, respectively. Pursuant to the terms of the Plan and the Settlement Agreement, if the Class of Non-Subordinated Bank Bondholder Claims (as defined in the Plan) votes to accept the Plan, then, such claims will be deemed allowed against the Debtors and will receive 5.357% of refunds attributable to the Act, subject to a cap of $150 million. If the Class of Non-Subordinated Bank Bondholder Claims votes to reject the Plan, then the Debtors will distribute amounts for such claims to the extent they are determined to be allowed by the Bankruptcy Court against the Debtors.

No provision or benefit from income taxes has been recorded as the NOLs are expected to be sufficient to offset income during the reported period. Income tax expense contains minimum taxes paid in certain states.


Note 7: Liabilities Subject to Compromise (Pre-Petition) – Payroll and Benefit Accruals

WMI’s pre-petition payroll and benefit accruals include balances reflecting WMI’s historic accounting policies related to pension accounting. Prior to the Petition Date, WMI recorded a $274 million liability in respect of such accruals and WMB recorded a $274 million asset, which amounts were netted out and eliminated on a consolidated basis. Neither balance was reported as an intercompany balance. WMI is analyzing these accounting entries and treatment within the context of its bankruptcy proceedings.

As set forth in the Settlement Agreement, upon consummation of the Plan, any potential liability related to this pension accounting will be waived.


 
 
 

Washington Mutual, Inc. / WMI Investment Corp.
June 2010 Monthly Operating Report -- UNAUDITED
MOR 4 Status of Postpetition Taxes

   
Washington Mutual, Inc.
WMI Investment Corp
   
Beginning Tax Liability
Amt approved for pmt
Taxes collected
Taxes remitted
Closing Balance Post Petition
Beginning Tax Liability
Amt approved for pmt
Taxes collected
Taxes remitted
Closing Balance Post Petition
                       
Federal
NOTES
                   
                       
Withholding
 
 26,436.00
 -
 52,701.00
(52,756.00)
 26,381.00
       
 -
FICA -- Employee
 
 4,067.51
 -
 8,102.77
(8,118.49)
 4,051.79
       
 -
FICA -- Employer
 
 4,067.51
 8,102.77
 -
(8,118.49)
 4,051.79
       
 -
Unemployment
 
 -
 -
 -
 -
 -
       
 -
Income
*
 -
 -
 -
 -
 -
       
 -
Other
 
 -
 -
 -
 -
 -
       
 -
Total Federal
 
 34,571.02
 8,102.77
 60,803.77
(68,992.98)
 34,484.58
 -
 -
 -
 -
 -
                       
State and Local
                     
                       
WA Withholding
n/a
 -
 -
 -
 -
 -
         
WA Disability
 
773.09
241.69
173.11
 -
 1,187.89
         
WA Unemployment
 
 1,498.33
165.62
 -
 -
 1,663.95
         
Sales/Use
**
 -
 -
 -
 -
 -
         
Real Property
n/a
 -
 -
 -
 -
 -
         
Personal Property
n/a
 -
 -
 -
 -
 -
         
Other
 
 1,967.57
 1,073.82
 -
 -
 3,041.39
         
   
 -
     
 -
         
Total State and Local
 
 4,238.99
 1,481.13
173.11
 -
 5,893.23
 -
 -
 -
 -
 -
                       
                       
Total Taxes
 
 38,810.01
 9,583.90
 60,976.88
(68,992.98)
 40,377.81
 -
 -
 -
 -
 -
                       

NOTES
 
   
*
WMI has booked no federal income tax on its post-petition income tax provision, nor has it made any federal payments.
**
WMI does not have any Washington or City of Seattle sales/use tax liability for the month of June
   
   
   
I attest that all tax returns have been filed in accordance with federal / state / county / city requirements for the above period.
   
   
  /s/  John Maciel  
John Maciel
Chief Financial Officer
Washington Mutual, Inc., et al
 


 
 
 


Washington Mutual, Inc. and WMI Investment Corp.
Tax Return Filings
For the Period 6/1/2010 through 6/30/2010

Property Tax Filings:
     
         
No property tax returns were filed during the period 6/1/2010 through 6/30/2010.
   
         
         
Sales/Use Tax Filings:
         
No sales/use tax returns were filed during the period 6/1/2010 through 6/30/2010.
   
         
         
Payroll Tax Filings:
         
Entity
Jurisdiction
Filing Description
Due Date
Date Filed
WMI
IRS (Federal)
Withholding summary of deposits and filings (semi-weekly)
6/02/2010
6/02/2010
WMI
IRS (Federal)
Withholding summary of deposits and filings (semi-weekly)
6/18/2010
6/18/2010
         
Corporate Income Tax/Franchise Tax/Gross Receipts Tax Filings:
         
Entity
Jurisdiction
Filing Description
Due Date
Date Filed
         


 
 
 


 
Case No. 08-12229 (MFW)
Washington Mutual, Inc., et al
 
MOR-4: Post Petition Accounts Payable Aging by Vendor
 
As of June 30, 2010
 

Washington Mutual, Inc.
                             
                               
Vendor
 
Current *
      31 - 60       61- 90    
91 and Over
   
Total
 
                                   
Adams, Marla
  $ 1,200.00     $ -     $ -     $ -     $ 1,200.00  
Akin, Gump, Strauss, Hauer & Feld LLP
    1,243,282.18       -       -       -       1,243,282.18  
Ashby & Geddes, P.A.
    21,599.10       -       -       -       21,599.10  
AT&T
    3,521.31       -       -       -       3,521.31  
Bingham McCutchen LLP / McKee Nelson LLP
    166,354.24       -       -       -       166,354.24  
Broadridge
    15.11       -       -       -       15.11  
Brouwer, Curt
    246.50       -       -       -       246.50  
Comcast
    199.90       -       -       -       199.90  
Davis Wright Tremaine LLP
    1,452.10       -       -       -       1,452.10  
Elliott Greenleaf
    24,507.18       -       -       -       24,507.18  
FTI Consulting, Inc.
    124,913.80       -       -       -       124,913.80  
Gibson, Dunn & Crutcher LLP
    49,056.56       -       -       -       49,056.56  
Grant Thornton
    21,651.00       -       -       -       21,651.00  
Integreon Discovery Solutions DC
    7,561.02       -       -       -       7,561.02  
John W. Wolfe, P.S.
    359,875.49       -       -       -       359,875.49  
Kadesh & Associates LLC
    12,500.00       -       -       -       12,500.00  
Lifewise Assurance Company
    1,577.61       -       -       -       1,577.61  
Logan, Doreen
    153.00       -       -       -       153.00  
M&E Transportation
    157.50       -       -       -       157.50  
Mellon Investor Services, LLC
    5,675.17       -       -       -       5,675.17  
Miller & Chevalier Chartered
    114,911.12       -       -       -       114,911.12  
Nguyen, Nicholas P.
    284.05       -       -       -       284.05  
Pepper Hamilton LLP
    99,152.80       -       -       -       99,152.80  
Perkins Coie LLP
    173,494.24       -       -       -       173,494.24  
Pitney Bowes Inc.
    929.24       -       -       -       929.24  
PricewaterhouseCoopers LLP
    1,016.20       -       -       -       1,016.20  
Puget Sound Beverage Service
    161.50       -       -       -       161.50  
Quinn Emanuel Urquhart Oliver & Hedges
    1,320,163.60       -       -       -       1,320,163.60  
Richards, Layton & Finger P.A.
    111,031.60       -       -       -       111,031.60  
Schrag, Jan
    272.26       -       -       -       272.26  
Shearman & Sterling LLP
    52,317.39       -       -       -       52,317.39  
Silverstein & Pomerantz, LLP
    3,706.50       -       -       -       3,706.50  
Simpson Thacher & Bartlett LLP
    23,497.58       -       -       -       23,497.58  
Susman Godfrey LLP
    130,396.99       -       -       -       130,396.99  
Suzuki, Dennis
    108.00       -       -       -       108.00  
TIAA CREF Hines Property Management
    1,333.48       -       -       -       1,333.48  
Towers Watson Pennsylvania Inc.
    15,527.75       -       -       -       15,527.75  
Venable LLP
    128,152.24       -       -       -       128,152.24  
Vision Service Plan
    194.20       -       -       -       194.20  
Weil, Gotshal & Manges LLP
    2,927,433.56       -       -       -       2,927,433.56  
                                         
Total
  $ 7,149,583.07     $ -     $ -     $ -     $ 7,149,583.07  

NOTES
* Any holdback for professionals pursuant to their respective retention orders are included in "Current"

 
 
 

DEBTOR QUESTIONNAIRE
 
 
Must be completed each month
 
 
Yes
 
No
1. 
Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.
 
X
2. 
Have any funds been disbursed from any account other than a debtor in possession account this reporting period? If yes, provide an explanation below.
 
X
3.
Have all post petition tax returns been timely filed? If no, provide an explanation below.
X
 
4.
Are workers compensation, general liability and other necessary insurance coverage in effect? If no, provide an explanation below.
X
 
5.
Has any bank account been opened during the reporting period? If yes, provide documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.
 
X