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):  April 30, 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 April 30, 2010, Washington Mutual, Inc. (the “ Company ”) and WMI Investment Corp. (together with the Company, the “ Debtors ”) filed their monthly operating report for the period March 1, 2010 to March 31, 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
 
 
 
 
 
 
 
 
Chapter 11 proceeding prosecuted by it from time to time; (ii) risks associated with third parties seeking and obtaining Court approval to convert the case to a Chapter 7 case; and (iii) the potential adverse impact of the Chapter 11 case on the Company’s 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 March 1, 2010 to March 31, 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:  April 30, 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: 03-01-10 to 03-31-10
   
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
 
April 30, 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. 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 in the bankruptcy case 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
Case No. 08-12229 (MFW)
March 2010 Monthly Operating Report -- UNAUDITED
 
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 - 02/28/2010
261,943,843
 3,676,589,643
4,660
749,527
10,945,990
4,257,891
 3,954,491,554
 53,612,165
258,120
53,870,285
 4,008,361,839
                       
Receipts
                     
                       
Interest & investment returns
 28,091
 394,277
 -
80
 1,395
1,750,444
 2,174,288
 5,749
 -
 5,749
 2,180,038
Tax refunds
         
21,019
21,019
   
 -
21,019
Reimbursements/distributions from subs
         
 -
 -
   
 -
 -
Sales of assets/securities
         
 -
 -
   
 -
 -
Return of lease deposit
         
 126,338
 126,338
   
 -
 126,338
Other miscellaneous receipts
         
 8,377
 8,377
   
 -
 8,377
Total Receipts
 28,091
 394,277
 -
80
 1,395
1,906,178
 2,330,022
 5,749
 -
 5,749
 2,335,772
                       
                       
Transfers
                     
                       
Sweep to/(from) Money Market account
       
 (4,000,000)
 4,000,000
 -
 
 -
 -
 -
Transfer (to)/from Wells Managed Account
       
 -
 -
 -
 
 -
 -
 -
Total Transfers
 -
 -
 -
 -
 (4,000,000)
 4,000,000
 -
 -
 -
 -
 -
                       
                       
Disbursements
                     
                       
Salaries and benefits
         
 309,490
 309,490
 -
 -
 -
 309,490
Travel and other expenses
         
 22,221
 22,221
 -
 -
 -
 22,221
Occupancy and supplies
         
 124,971
 124,971
 -
 -
 -
 124,971
Professional fees
         
 2,938,433
 2,938,433
 -
 -
 -
 2,938,433
Other outside services
         
 112,810
 112,810
 -
 -
 -
 112,810
Bank fees
         
 28,373
 28,373
 -
 31
 31
 28,404
US Trustee quarterly Fees
         
 -
 -
 -
 -
 -
 -
Directors fees
         
 60,000
 60,000
 -
 -
 -
 60,000
Taxes paid
         
4,000
4,000
 -
 -
 -
4,000
Total Disbursements
 -
 -
 -
 -
 
 3,600,298
 3,600,298
 -
 31
 31
 3,600,328
                       
Net Cash Flow
 28,091
 394,277
 -
80
 (3,998,605)
 2,305,881
 (1,270,275)
 5,749
 (31)
 5,719
 (1,264,557)
                       
Cash - End of Month
 261,971,934
 3,676,983,920
4,660
 749,607
 6,947,385
 6,563,772
3,953,221,279
 53,617,914
 258,089
 53,876,004
 4,007,097,282
                       
GL Balance
 261,971,934
 3,676,983,920
4,660
 749,607
 6,947,385
 6,563,772
3,953,221,278
 53,617,915
 258,089
 53,876,003
4,007,097,281
                       
Net value - short-term securities
           
 613,230,681
   
221,389,295
834,619,976
                       
Total Cash & Cash Equivalents
           
 4,566,451,959
   
275,265,298
 4,841,717,258


 
 
 

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

 
Washington Mutual, Inc., et al                                                                                                                                  Case No. 08-12229 (MFW)
March 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, and 9663 (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 WaMu deposit platform to the Chase deposit platform. Since the transition, JPMorgan has only provided the Debtors with bank account statements for certain months. We have not received bank statements for the period covered by this MOR for the Excluded Accounts. Therefore, we are unable to reconcile information related to the Excluded Accounts against a related bank statement. We have continued to record interest income on the accounts consistent with prior practice and based on existing agreement with JPMorgan.


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

 
 
 


   
Case No. 08-12229 (MFW)
Washington Mutual, Inc.
   
MOR-1B: Schedule of Professional Fees Paid
   
Month Ended Mar 31, 2010
   

       
Check
 
Amount Paid - Mar'10
   
Amount Paid CTD
 
Payee
 
Period Covered
 
Number
 
Date
 
Fees
   
Expense
   
Fees
   
Expense
 
                                     
Akin, Gump, Strauss, Hauer & Feld LLP
 
01/01/10 - 01/31/10
 
Wire
 
03/25/10
  $ 439,752.80     $ 10,097.25     $ 9,432,867.26     $ 305,566.47  
Alvarez & Marsal
 
02/01/10 - 02/28/10
 
Wire
 
03/25/10
    1,790,124.50       76,186.89       33,804,794.24       1,643,320.67  
CONSOR Intellectual Asset Management
                                255,318.00       3,249.00  
CP Energy Group, LLC
                                91,347.88       159.47  
Davis Wright Tremaine LLP
 
12/01/09 - 01/31/10
    2300, 2334  
03/11/10, 03/25/10
    11,614.80       -       672,067.40       24,499.50  
Elliott Greenleaf
                                420,263.30       32,756.45  
FTI Consulting, Inc.
 
01/01/10 - 01/31/10
 
Wire
 
03/25/10
    139,596.80       537.11       4,140,334.30       35,856.90  
Gibson, Dunn & Crutcher LLP
                                615,519.35       10,116.48  
Grant Thornton
 
01/01/10 - 01/31/10
    2336  
03/25/10
    12,928.00       624.01       367,271.20       31,651.74  
Joele Frank, Wilkinson Brimmer Katcher
 
02/01/10 - 02/28/10
    2317  
03/17/10
    1,643.75       473.85       138,336.25       9,556.40  
John W. Wolfe, P.S.
 
01/01/10 - 01/31/10
 
Wire
 
03/17/10
    164,399.60       356.50       1,225,884.20       1,928.83  
Kurtzman Carson Consultants LLC
 
02/01/10 - 02/28/10
    2320  
03/17/10
    57,741.94       -       1,532,079.97       -  
McKee Nelson LLP / Bingham McCutchen LLP
                                1,782,246.35       116,573.66  
Miller & Chevalier Chartered
                                273,113.74       110.63  
Milliman
                                29,697.49       -  
Pepper Hamilton LLP
 
12/01/09 - 01/31/10
 
Wires
 
03/04/10, 03/25/10
    81,773.20       8,351.22       1,776,307.63       90,677.25  
Perkins Coie LLP
 
12/01/09 - 12/31/09
 
Wire
 
03/11/10
    50,960.00       4,184.54       1,473,120.04       66,504.82  
PricewaterhouseCoopers LLP
 
12/01/09 - 01/31/10
    2288, 2343  
03/04/10, 03/25/10
    38,466.40       -       1,657,687.20       184,532.35  
Quinn Emanuel Urquhart Oliver & Hedges
                                6,206,808.40       186,118.98  
Richards, Layton & Finger P.A.
 
01/01/10 - 01/31/10
 
Wires
 
03/25/10
    35,256.80       8,501.75       413,665.60       52,362.93  
Shearman & Sterling LLP
                                892,693.40       18,165.53  
Silverstein & Pomerantz, LLP
                                14,826.00       77.53  
Simpson Thacher & Bartlett LLP
 
12/01/09 - 12/31/09
    2305  
03/11/10
    4,860.80       -       450,269.05       11,045.33  
Towers, Perrin, Forster & Crosby, Inc.
                                127,901.43       -  
Weil, Gotshal & Manges LLP
                                15,632,576.00       456,149.30  
                                             
Total
              $ 2,829,119.39     $ 109,313.12     $ 83,426,995.68     $ 3,280,980.22  



 
 
 
 
 
 

Washington Mutual, Inc., et al
Case No. 08-12229 (MFW)
March 2010 Monthly Operating Report -- UNAUDITED
 
MOR 2 Statement of Operations for the period 03/1/10 to 03/31/10
 

 
Washington Mutual, Inc.
 
WMI Investment Corp.
 
March 2010
 
Cumulative to Date
 
March 2010
 
Cumulative to Date
Revenues:
             
Interest income:
             
Cash equivalents
511,663
 
 13,877,830
 
 34,127
 
719,945
Securities
253,604
 
4,726,302
 
 -
 
2,976,201
Notes receivable - intercompany
 43,788
 
1,261,017
 
 -
 
 1
Other
 140
 
1,031,111
 
 -
 
 -
Total interest income
809,195
 
 20,896,260
 
 34,127
 
3,696,147
Earnings (losses) from subsidiaries and other equity investments
 (1,079,940)
 
 (187,678,109)
 
 (41,563)
 
 (5,137,178)
Gains (losses) from securities / investments
 62,918
 
(10,001,694)
 
 -
 
 (112,260,368)
Other income
417,541
 
3,278,605
 
 -
 
 (0)
Total revenues
209,714
 
 (173,504,938)
 
(7,436)
 
 (113,701,399)
               
Operating expenses:
             
Compensation and benefits
433,968
 
7,599,242
 
 -
 
 -
Occupancy and equipment
 89,891
 
1,654,538
 
 -
 
 -
Professional fees
849,845
 
 10,530,269
 
 -
 
 148
Loss / (Income) from BOLI/COLI policies
 (248,231)
 
 (7,143,683)
 
 -
 
 -
Management fees / Transition services
 30,000
 
2,240,014
 
 -
 
 -
Insurance
217,203
 
 15,879,204
 
 -
 
 -
Other
194,951
 
2,172,863
 
 14,473
 
480,728
Total operating expenses
1,567,628
 
 32,932,447
 
 14,473
 
480,877
               
Net profit (loss) before other income and expenses
 (1,357,915)
 
 (206,437,385)
 
 (21,909)
 
 (114,182,276)
               
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
 (1,357,915)
 
 (151,409,385)
 
 (21,909)
 
 (114,182,276)
               
Reorganization items:
             
Professional fees
7,681,838
 
 96,351,021
 
 -
 
322,043
Claims Adjustments
 -
 
 23,275,982
 
 -
 
 -
US Trustee quarterly fees
 7,000
 
113,000
 
 -
 
 11,050
Gains (losses) from sale of assets
 -
 
 -
 
 -
 
 -
Other reorganization expenses
 96,654
 
8,991,493
 
 -
 
 -
Total reorganization items
7,785,492
 
 128,731,495
 
 -
 
333,093
Net profit (loss) before income taxes
 (9,143,407)
 
 (280,140,880)
 
 (21,909)
 
 (114,515,369)
               
Income taxes
 4,000
 
 4,050
 
 -
 
 -
               
Net profit (loss)
 (9,147,407)
 
 (280,144,930)
 
 (21,909)
 
 (114,515,369)
               
Income tax rate
0.0%
 
0.0%
 
0.0%
 
0.0%


 
 
 


Washington Mutual, Inc., et al
Case No. 08-12229 (MFW)
March 2010 Monthly Operating Report -- UNAUDITED
 
MOR 3 Balance Sheet as of 03/31/2010 and 9/26/2008
 

 
Washington Mutual, Inc.
 
WMI Investment Corp.
 
3/31/2010
 
9/26/08
 
3/31/2010
 
9/26/08
Assets:
             
Unrestricted cash and cash equivalents
 4,566,451,959
 
 4,018,083,009
 
275,265,299
 
 52,974,376
Restricted cash and cash equivalents
 92,671,007
 
 145,668,884
 
 -
 
-
Investment securities
 70,470,182
 
 59,688,627
 
 -
 
 266,444,881
Accrued interest receivable
789,314
 
413,253
 
 3,246
 
4,084,658
Income tax receivable
 475,595,347
 
 742,680,150
 
 22,187,560
 
 22,187,560
Prepaid expenses
3,046,518
 
 11,311,510
 
 -
 
-
Cash surrender value of BOLI/COLI
 89,972,086
 
 84,039,738
 
 -
 
-
Funded Pension
 39,173,922
 
 638,870,071
 
 -
 
-
Other investments
-
 
 23,668,909
 
 58,530,524
 
 65,952,708
Investment in subsidiaries
 1,477,309,096
 
 1,895,218,467
 
 -
 
-
Notes receivable - intercompany
 12,651,138
 
 58,001,133
 
565,844,197
 
 565,844,197
Fixed Assets
 82,342
 
-
 
 -
 
-
Other assets
 96,347,638
 
 23,489,277
 
 -
 
-
Total assets
 6,924,560,550
 
 7,701,133,028
 
921,830,827
 
 977,488,380
               
Liabilities not subject to compromise (Postpetition):
             
Accounts payable
7,780,036
 
-
 
 6,000
 
-
Accrued wages and benefits
443,311
 
-
 
 -
 
-
Other accrued liabilities
 13,735,957
 
-
 
19,375
 
-
Minority interest
1,113,298
 
3,104,022
 
 -
 
-
Total post-petition liabilities
 23,072,601
 
3,104,022
 
25,375
 
-
               
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
 550,080,833
 
 550,080,833
 
 -
 
-
Payroll and benefit accruals
 407,057,301
 
 407,215,221
 
 -
 
-
Other accrued liabilities
 86,364,578
 
 92,259,015
 
 -
 
-
Other pre-petition liabilities
 198
 
 223
 
 -
 
-
Total pre-petition liabilities
 8,296,639,680
 
 8,278,878,868
 
 -
 
-
               
Total liabilities
 8,319,712,282
 
 8,281,982,890
 
25,375
 
-
               
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
(754,476,936)
 
(222,770,180)
 
 22,187,560
 
 (36,644,880)
Retained earnings - pre-petition
(16,741,625,375)
 
 (16,739,175,191)
 
 14,133,260
 
 14,133,260
Retained earnings - post-petition
(280,144,930)
 
-
 
 (114,515,369)
 
-
Total shareholders' equity
(1,395,151,731)
 
(580,849,862)
 
921,805,452
 
 977,488,380
               
Total liabilities and shareholder's equity
 6,924,560,550
 
 7,701,133,028
 
921,830,827
 
 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

On March 26, 2010, the Debtors filed their Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the Bankruptcy Code [D.I. 2622] (the “Plan”) and related Disclosure Statement [D.I. 2623] (the “Disclosure Statement”) with the Bankruptcy Court. The Plan is premised upon a proposed global settlement and compromise of certain disputes among the Debtors, JPMorgan, the FDIC and certain significant creditor constituencies (as described below). Aspects of the Plan are referred to in the Notes to MOR-2 and MOR 3 herein; however, users of this monthly operation report should refer to the Plan, Disclosure Statement and related documents directly for complete information.


Note 2: Settlement Agreement with JPMorgan Chase and FDIC

On March 12, 2010, the Debtors announced to the Bankruptcy Court that they had reached an agreement with the FDIC, JPMorgan and certain of the Debtors’ significant creditor constituencies to resolve certain disputes among such parties, and described on the record the general terms of this agreement. A proposed settlement agreement consistent with the terms of this announcement (the “Settlement Agreement”) was filed as an exhibit to the Plan. The proposed Settlement Agreement is an integral part of the Plan and is subject to final documentation, execution and consummation 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 proposed Settlement Agreement. Additionally, while the provisions of the proposed Settlement Agreement have been agreed upon by WMI, JPMorgan and significant creditor groups of WMI, as of this date, the FDIC has not agreed to all the provisions contained in the proposed Settlement Agreement. However, discussions are ongoing among the parties, and they are hopeful that such agreement will be obtained in the near future.
 
Note 3: 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 proposed Settlement Agreement, upon consummation of the Plan, WMI and relevant third parties will complete the Conditional Exchange.

Note 4: Restricted Cash and Cash Equivalents

WMI’s restricted cash and cash equivalents of $93 million includes $36 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 $4 million held as part of a Rabbi Trust.

Pursuant to the terms of the proposed 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.

Note 5: 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 proposed Settlement Agreement, upon consummation of the Plan, JPMorgan will satisfy the unsecured notes receivable to WMI subsidiaries.
 
Note 6: 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 proposed 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 7: 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. Various parties claim ownership rights to these refunds. As set forth in the proposed Settlement Agreement, upon consummation of the Plan, WMI and JPMorgan will split the tax refunds 30%/70%, respectively (once received).

On November 6, 2009, the Worker, Homeownership, and Business Assistance Act of 2009 (the “Act”) became 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 carryback period from two years to five years (with such taxpayers only receiving half this benefit in the fifth year). WMI estimates such an election could result in additional refunds of approximately $2.7 – $2.8 billion, as to which there are competing claims of ownership . As set forth in the proposed Settlement Agreement, upon consummation of the Plan, WMI and the FDIC (or its designee) will split the tax refunds attributable to the Act 40.4%/59.6%, respectively (once received).

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


Note 8: 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 proposed Settlement Agreement, upon consummation of the Plan, any potential liability related to this pension accounting will be waived.

 
 

 
 
 

Washington Mutual, Inc. / WMI Investment Corp.
Case No. 08-12229 (MFW)
March 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
 
 30,765.00
-
 59,611.00
 (60,390.00)
 29,986.00
       
-
FICA -- Employee
 
 6,581.50
-
 9,654.60
 (11,735.91)
 4,500.19
       
-
FICA -- Employer
 
 6,581.50
 9,654.60
-
 (11,735.91)
 4,500.19
       
-
Unemployment
 
 952.00
-
-
-
 952.00
       
-
Income
*
-
-
-
-
-
       
-
Other:
 
-
-
-
-
-
       
-
Total Federal
 
 44,880.00
 9,654.60
 69,265.60
 (83,861.82)
 39,938.38
-
-
-
-
-
                       
State and Local
                     
                       
Withholding
n/a
                   
Sales/Use
**
-
-
-
-
-
         
Unemployment
 
 14,992.75
 1,485.70
-
 
 16,478.45
         
Disability
 
 728.94
 254.28
 182.09
 
 1,165.31
         
Real Property
n/a
-
     
-
         
Personal Property
n/a
-
-
   
-
         
Other
 
 1,847.60
 838.54
-
-
 2,686.14
         
   
-
     
-
         
Total State and Local
 17,569.29
 2,578.52
 182.09
-
 20,329.90
-
-
-
-
-
                       
                       
Total Taxes
 
 62,449.29
 12,233.12
 69,447.69
 (83,861.82)
 60,268.28
-
-
-
-
-
                       

 

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 March
 
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 3/1/2010 through 3/31/2010

Property Tax Filings:
     
         
No property tax returns were filed during the period 3/1/2010 through 3/31/2010.
   
         
         
Sales/Use Tax Filings:
     
         
No sales/use tax returns were filed during the period 3/1/2010 through 3/31/2010.
   
         
         
Payroll Tax Filings:
     
         
Entity
Jurisdiction
Filing Description
Due Date
Date Filed
WMI
IRS (Federal)
Withholding summary of deposits and filings (semi-weekly)
3/19/2010
3/19/2010
         
         
         
         
Corporate Income Tax/Franchise Tax/Gross Receipts Tax Filings:
   
         
Entity
Jurisdiction
Filing Description
Due Date
Date Filed
WMI & Subs
IRS (Federal)
Corporation income tax return extension
3/15/2010
3/15/2010


 
 
 


 
Case No. 08-12229 (MFW)
Washington Mutual, Inc., et al
 
MOR-4: Post Petition Accounts Payable Aging by Vendor
 
As of March 31, 2010
 

Washington Mutual, Inc.
 
Vendor
 
Current *
      31 - 60       61- 90    
91 and Over
   
Total
 
                                   
60th Street Advisors
  $ 24,187.00     $ -     $ -     $ -     $ 24,187.00  
Akin, Gump, Strauss, Hauer & Feld LLP
    413,825.80       -       -       -       413,825.80  
AT&T
    3,174.49       -       -       -       3,174.49  
Bass, Berry & Sims
    4,956.57       -       -       -       4,956.57  
Bingham McCutchen LLP / McKee Nelson LLP
    287,731.19       -       -       -       287,731.19  
Bowne of Los Angeles, Inc.
    26,311.08       -       -       -       26,311.08  
Comcast
    199.90       -       -       -       199.90  
Cronk, Thomas
    3,164.56       -       -       -       3,164.56  
Davis Wright Tremaine LLP
    11,332.55       -       -       -       11,332.55  
Ed Gillespie Strategies LLC
    80,000.00       -       -       -       80,000.00  
Elliott Greenleaf
    159,653.95       -       -       -       159,653.95  
Fidelity Investments
    36,107.80       -       -       -       36,107.80  
FTI Consulting, Inc.
    183,404.00       -       -       -       183,404.00  
Gibson, Dunn & Crutcher LLP
    67,394.53       -       -       -       67,394.53  
Grant Thornton
    59,485.02       -       -       -       59,485.02  
John W. Wolfe, P.S.
    361,347.96       -       -       -       361,347.96  
Lifewise Assurance Company
    1,577.61       -       -       -       1,577.61  
Logan, Doreen
    340.00       -       -       -       340.00  
M&E Transportation
    210.00       -       -       -       210.00  
Martin, Colleen
    5,171.00       -       -       -       5,171.00  
Miller & Chevalier Chartered
    210,480.86       -       -       -       210,480.86  
Nguyen, Nicholas P.
    99.00       -       -       -       99.00  
Pepper Hamilton LLP
    105,505.80       -       -       -       105,505.80  
Perkins Coie LLP
    122,029.44       -       -       -       122,029.44  
PricewaterhouseCoopers LLP
    404,141.80       -       -       -       404,141.80  
Quinn Emanuel Urquhart Oliver & Hedges
    1,762,052.38       -       -       -       1,762,052.38  
Richards, Layton & Finger P.A.
    61,304.60       -       -       -       61,304.60  
Shearman & Sterling LLP
    53,893.64       -       -       -       53,893.64  
Silverstein & Pomerantz, LLP
    3,706.50       -       -       -       3,706.50  
Simpson Thacher & Bartlett LLP
    5,207.20       -       -       -       5,207.20  
Smith, Charles E.
    9,676.61       -       -       -       9,676.61  
Suzuki, Dennis
    99.00       -       -       -       99.00  
Weil, Gotshal & Manges LLP
    3,306,749.90       -       -       -       3,306,749.90  
Wu, Weijia
    5,514.21       -       -       -       5,514.21  
                                         
Total
  $ 7,780,035.95     $ -     $ -     $ -     $ 7,780,035.95  

WMI Investment Corp.
 
Vendor
 
Current
      31 - 60       61- 90    
91 and Over
   
Total
 
                                   
CP Energy Group, LLC
  $ 6,000.00     $ -     $ -     $ -     $ 6,000.00  
                                         
Total
  $ 6,000.00     $ -     $ -     $ -     $ 6,000.00
 
  
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