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):  March 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 March 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 February 1, 2010 to February 28, 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 February 1, 2010 to February 28, 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:  March 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: 02-01-10 to 02-28-10
   
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
 
March 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)
February 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 - 01/31/2010
 261, 896 ,498
 3,676,168,171
4,660
 749,392
15,944,521
 5,026,001
 3,959,789,243
53,602,475
 42,582
53,645,057
 4,013,434,300
                       
Receipts
                     
                       
Interest & investment returns
 47,345
 421,472
-
135
1,469
-
 470,421
9,690
 231,628
 241,319
 711,740
Tax refunds
         
 334,168
 334,168
   
-
 334,168
Reimbursements/distributions from subs
         
-
-
   
-
-
Sales of assets/securities
         
-
-
   
-
-
Rebates
         
-
-
     
-
Other miscellaneous receipts
         
 13,840
 13,840
   
-
 13,840
Total Receipts
 47,345
 421,472
-
135
1,469
 348,008
 818,429
9,690
 231,628
 241,319
 1,059,748
                       
Transfers
                     
                       
Sweep to/(from) Money Market account
       
 (5,000,000)
 5,000,000
-
 
-
-
-
Transfer (to)/from Wells Managed Account
       
-
-
-
 
-
-
-
Total Transfers
-
-
-
-
 (5,000,000)
 5,000,000
-
-
-
-
-
                       
Disbursements
                     
                       
Salaries and benefits
         
 326,833
 326,833
-
-
-
 326,833
Travel and other expenses
         
 23,108
 23,108
-
-
-
 23,108
Occupancy and supplies
         
 221,612
 221,612
-
-
-
 221,612
Professional fees
         
 4,917,176
 4,917,176
-
 16,043
 16,043
 4,933,219
Other outside services
         
 537,251
 537,251
-
-
-
 537,251
Bank fees
         
 23,820
 23,820
-
 47
 47
 23,867
US Trustee quarterly Fees
         
-
-
-
-
-
-
Directors fees
         
 60,000
 60,000
-
-
-
 60,000
Taxes paid
         
6,318
6,318
-
-
-
6,318
Total Disbursements
-
-
-
-
 
 6,116,118
 6,116,118
-
 16,090
 16,090
 6,132,208
                       
Net Cash Flow
 47,345
 421,472
-
135
 (4,998,531)
 (768,110)
 (5,297,689)
9,690
 215,538
 225,228
 (5,072,460)
                       
Cash - End of Month
 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
 4,008,361,840
                       
GL Balance
 261,943,843
3,676,589,643
4,660
 749,527
10,945,990
 4,257,891
3,954,491,553
53,612,165
 258,120
53,870,285
4,008,361,838
                       
Net value - short-term securities
           
 613,191,952
   
 221,375,316
 834,567,268
                       
Total Cash & Cash Equivalents
           
 4,567,683,505
   
 275,245,601
 4,842,929,106


 
 
 


   
Case No. 08-12229 (MFW)
Washington Mutual, Inc.
   
MOR-1B: Schedule of Professional Fees Paid
   
Month Ended Feb 28, 2010
   
     

     
Check
 
Amount Paid - Feb'10
   
Amount Paid CTD
 
Payee
Period Covered
 
Number
 
Date
 
Fees
   
Expense
   
Fees
   
Expense
 
                                   
Akin, Gump, Strauss, Hauer & Feld LLP
12/01/09 - 12/31/09
 
Wire
 
02/25/10
  $ 214,081.20     $ 7,708.16     $ 8,993,114.46     $ 295,469.22  
Alvarez & Marsal
01/01/10 - 01/31/10
 
Wire
 
02/25/10
    1,775,679.30       85,748.05       32,014,669.74       1,567,133.78  
CONSOR Intellectual Asset Management
                              255,318.00       3,249.00  
CP Energy Group, LLC
                              91,347.88       159.47  
Davis Wright Tremaine LLP
10/01/09 - 11/30/09
    2177, 2201  
02/04/10, 02/11/10
    4,629.60       -       660,452.60       24,499.50  
Elliott Greenleaf
                              420,263.30       32,756.45  
FTI Consulting, Inc.
12/01/09 - 12/31/09
 
Wire
 
02/25/10
    63,430.00       144.19       4,000,737.50       35,319.79  
Gibson, Dunn & Crutcher LLP
10/01/09 - 11/30/09
    2228  
02/18/10
    27,559.60       41.50       615,519.35       10,116.48  
Grant Thornton
12/01/09 - 12/31/09
    2202  
02/11/10
    6,255.20       -       354,343.20       31,027.73  
Joele Frank, Wilkinson Brimmer Katcher
                                136,692.50       9,082.55  
John W. Wolfe, P.S.
12/01/09 - 12/31/09
 
Wire
 
02/18/10
    118,125.60       245.92       1,061,484.60       1,572.33  
Kurtzman Carson Consultants LLC
11/01/09 - 01/31/10
 
2182, 2231, Wire
 
02/04/10, 02/18/10, 02/25/10
    171,342.41       -       1,474,338.03       -  
McKee Nelson LLP / Bingham McCutchen LLP
11/01/09 - 12/31/09
 
Wires
 
02/04/10, 02/25/10
    121,396.40       82,618.26       1,782,246.35       116,573.66  
Miller & Chevalier Chartered
12/01/09 - 12/31/09
    2232  
02/18/10
    45,254.00       14.20       273,113.74       110.63  
Milliman
                                29,697.49       -  
Pepper Hamilton LLP
                                1,694,534.43       82,326.03  
Perkins Coie LLP
10/01/09 - 11/30/09
 
Wires
 
02/04/10, 02/25/10
    96,894.40       5,358.33       1,422,160.04       62,320.28  
PricewaterhouseCoopers LLP
11/01/09 - 11/30/09
 
Wire
 
02/04/10
    59,274.80       6,580.58       1,619,220.80       184,532.35  
Quinn Emanuel Urquhart Oliver & Hedges
11/01/09 - 11/30/09
 
Wire
 
02/25/10
    653,688.80       22,886.43       6,206,808.40       186,118.98  
Richards, Layton & Finger P.A.
11/01/09 - 12/31/09
 
Wires
 
02/04/10, 02/25/10
    33,996.40       3,376.44       378,408.80       43,861.18  
Shearman & Sterling LLP
11/01/09 - 12/31/09
    2215, 2185  
02/04/10, 02/11/10
    48,353.20       1,332.22       892,693.40       18,165.53  
Silverstein & Pomerantz, LLP
                                14,826.00       77.53  
Simpson Thacher & Bartlett LLP
10/01/09 - 11/30/09
    2186  
02/04/10
    7,824.00       16.56       445,408.25       11,045.33  
Towers, Perrin, Forster & Crosby, Inc.
12/01/09 - 02/28/10
    2188, 2189  
02/04/10
    47,000.00       -       127,901.43       -  
Weil, Gotshal & Manges LLP
10/01/09 - 10/31/09
 
Wire
 
02/25/10
    1,134,243.60       72,076.84       15,632,576.00       456,149.30  
                                             
Total
              $ 4,629,028.51     $ 288,147.68     $ 80,597,876.29     $ 3,171,667.10  


 
 
 


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


Washington Mutual, Inc., et al                                                                                                                                  Case No. 08-12229 (MFW)
February 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 WaMu deposit platform to the Chase deposit platform. Since the transition began, 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.      
 
 



 
 
 

Washington Mutual, Inc., et al
Case No. 08-12229 (MFW)
February 2010 Monthly Operating Report -- UNAUDITED
 
MOR 2 Statement of Operations for the period 02/1/10 to 02/28/10
 

       
Washington Mutual, Inc.
 
WMI Investment Corp.
       
February 2010
 
Cumulative to Date
 
February 2010
 
Cumulative to Date
Revenues:
             
 
Interest income:
             
   
Cash equivalents
 519,827
 
13,366,167
 
 35,268
 
 685,818
   
Securities
 249,789
 
 4,472,698
 
 -
 
 2,976,201
   
Notes receivable - intercompany
 48,480
 
 1,217,228
 
 -
 
 1
   
Other
155
 
 1,030,971
 
 -
 
 -
     
Total interest income
 818,250
 
20,087,064
 
 35,268
 
 3,662,020
 
Earnings (losses) from subsidiaries and other
             
   
equity investments
(1,627,210)
 
 (186,598,169)
 
 (41,563)
 
(5,095,615)
 
Gains (losses) from securities / investments
 55,171
 
 (10,064,612)
 
 21,713
 
 (112,260,368)
 
Other income
 845,511
 
 2,861,065
 
 -
 
 (0)
     
Total revenues
 91,723
 
 (173,714,652)
 
 15,418
 
 (113,693,963)
                     
Operating expenses:
             
 
Compensation and benefits
 449,812
 
 7,165,274
 
 -
 
 -
 
Occupancy and equipment
 126,192
 
 1,564,647
 
 -
 
 -
 
Professional fees
 780,211
 
 9,680,423
 
 -
 
148
 
Loss / (Income) from BOLI/COLI policies
(143,575)
 
(6,895,452)
 
 -
 
 -
 
Management fees / Transition services
 30,000
 
 2,210,014
 
 -
 
 -
 
Insurance
 240,834
 
15,662,001
 
 -
 
 -
 
Other
 
 167,816
 
 1,977,911
 
 14,483
 
 466,255
     
Total operating expenses
 1,651,289
 
31,364,818
 
 14,483
 
 466,404
                     
     
Net profit (loss) before other income
             
     
and expenses
(1,559,566)
 
 (205,079,469)
 
935
 
 (114,160,367)
                     
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
(1,559,566)
 
 (150,051,469)
 
935
 
 (114,160,367)
                     
Reorganization items:
             
 
Professional fees
 4,839,182
 
88,669,183
 
 -
 
 322,043
 
Claims Adjustments
 -
 
23,275,982
 
 -
 
 -
 
US Trustee quarterly fees
 -
 
 106,000
 
 -
 
 11,050
 
Gains (losses) from sale of assets
 -
 
 -
 
 -
 
 -
 
Other reorganization expenses
 254,235
 
 8,894,839
 
 -
 
 -
     
Total reorganization items
 5,093,417
 
 120,946,003
 
 -
 
 333,093
     
Net profit (loss) before income taxes
(6,652,984)
 
 (270,997,473)
 
935
 
 (114,493,459)
                     
Income taxes
 -
 
 50
 
 -
 
 -
                     
Net profit (loss)
(6,652,984)
 
 (270,997,523)
 
935
 
 (114,493,459)
                     
Income tax rate
0.0%
 
0.0%
 
0.0%
 
0.0%


 
 
 


Washington Mutual, Inc., et al
Case No. 08-12229 (MFW)
February 2010 Monthly Operating Report -- UNAUDITED
 
MOR 3 Balance Sheet as of 02/28/2010 and 9/26/2008
 

       
Washington Mutual, Inc.
 
WMI Investment Corp.
       
2/28/2010
 
9/26/08
 
2/28/2010
 
9/26/08
Assets:
             
 
Unrestricted cash and cash equivalents
 4,567,683,505
 
4,018,083,009
 
275,245,601
 
 52,974,376
 
Restricted cash and cash equivalents
 95,403,332
 
145,668,884
 
 -
 
 -
 
Investment securities
 68,670,977
 
 59,688,627
 
 -
 
266,444,881
 
Accrued interest receivable
877,149
 
 413,253
 
 3,290
 
 4,084,658
 
Income tax receivable
 475,616,366
 
742,680,150
 
 22,187,560
 
 22,187,560
 
Prepaid expenses
3,443,628
 
 11,311,510
 
 -
 
 -
 
Cash surrender value of BOLI/COLI
 89,723,856
 
 84,039,738
 
 -
 
 -
 
Funded Pension
 39,173,922
 
638,870,071
 
 -
 
 -
 
Other investments
 -
 
 23,668,909
 
 58,572,087
 
 65,952,708
 
Investment in subsidiaries
 1,478,388,802
 
1,895,218,467
 
 -
 
 -
 
Notes receivable - intercompany
 12,607,350
 
 58,001,133
 
565,844,197
 
565,844,197
 
Fixed Assets
 85,571
 
 -
 
 -
 
 -
 
Other assets
 96,356,327
 
 23,489,277
 
 -
 
 -
     
Total assets
 6,928,030,786
 
7,701,133,028
 
921,852,736
 
977,488,380
                     
Liabilities not subject to compromise (Postpetition):
             
 
Accounts payable
4,418,434
 
 -
 
 6,000
 
 -
 
Accrued wages and benefits
319,708
 
 -
 
 -
 
 -
 
Other accrued liabilities
 11,521,893
 
 -
 
19,375
 
 -
 
Minority interest
1,113,064
 
 3,104,022
 
 -
 
 -
   
Total post-petition liabilities
 17,373,099
 
 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
 407,236,707
 
407,215,221
 
 -
 
 -
 
Other accrued liabilities
 86,364,578
 
 92,259,015
 
 -
 
 -
 
Other pre-petition liabilities
 198
 
 223
 
 -
 
 -
   
Total pre-petition liabilities
 8,296,819,086
 
8,278,878,868
 
 -
 
 -
                     
     
Total liabilities
 8,314,192,185
 
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
(754,454,605)
 
 (222,770,180)
 
 22,187,560
 
 (36,644,880)
 
Retained earnings - pre-petition
 (16,741,804,781)
 
(16,739,175,191)
 
 14,133,260
 
 14,133,260
 
Retained earnings - post-petition
(270,997,523)
 
 -
 
 (114,493,459)
 
 -
     
Total shareholders' equity
(1,386,161,399)
 
 (580,849,862)
 
921,827,361
 
977,488,380
                     
     
Total liabilities and shareholder's equity
 6,928,030,786
 
7,701,133,028
 
921,852,736
 
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 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 understanding with the FDIC, JPMorgan and the Debtors’ significant creditor constituencies to resolve certain disputes among such parties, and described on the record the general terms of this understanding. A settlement agreement consistent with the terms of this announcement currently is being documented (the “Settlement Agreement”), and a draft of such Settlement Agreement was filed as an exhibit to the Plan. The Settlement Agreement is an integral part of the Plan and is subject to final documentation, execution and 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 draft Settlement Agreement. Additionally, while the provisions of the draft Settlement Agreement have been agreed upon by virtually all parties thereto, the FDIC has not so agreed.
 
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 draft Settlement Agreement, upon confirmation 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 $95 million includes $37 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 $5 million held as part of a Rabbi Trust.

Pursuant to the terms of the draft Settlement Agreement, upon confirmation 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 draft Settlement Agreement, upon confirmation 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 draft Settlement Agreement, upon confirmation of the Plan, WMI will transfer sponsorship of the pension plan to JPMorgan, including all 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 draft Settlement Agreement, upon confirmation 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 draft Settlement Agreement, upon confirmation of the Plan, WMI and the FDIC will split the tax refunds attributable to the Act 40.4%/59.6% split, respectively (once received), and the FDIC will designate who receives its portion.

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 draft Settlement Agreement, upon confirmation 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)
February 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
 
 29,946.00
 -
 60,591.00
 (59,772.00)
 30,765.00
       
 -   
FICA -- Employee
 
 6,301.57
 -
 12,925.01
 (12,645.08)
 6,581.50
       
 -   
FICA -- Employer
 
 6,301.57
 12,925.01
 -
 (12,645.08)
 6,581.50
       
 -   
Unemployment
 
952.00
 -
 -
 -
952.00
       
 -   
Income
*
 -
 -
 -
 -
 -
       
 -   
Other:
 
 -
 -
 -
 -
 -
       
 -   
Total Federal
 
 43,501.14
 12,925.01
 73,516.01
 (85,062.16)
 44,880.00
 -
 -
 -
 -
 -   
                       
State and Local
                     
                       
Withholding
n/a
                   
Sales/Use
**
 -
 -
 -
 -
 -
         
Unemployment
 
 13,382.29
 1,978.31
 -
 (367.85)
 14,992.75
         
Disability
 
 1,541.68
213.89
153.25
 (1,179.88)
728.94
         
Real Property
n/a
 -
 -
   
 -
         
Personal Property
n/a
 -
 -
   
 -
         
Other
 
919.22
928.38
 -
 
 1,847.60
         
           
 -
         
Total State and Local
 
 15,843.19
 3,120.58
153.25
 (1,547.73)
 17,569.29
 -
 -
 -
 -
 -   
                       
                       
Total Taxes
 
 59,344.33
 16,045.59
 73,669.26
 (86,609.89)
 62,449.29
 -
 -
 -
 -
 -   
                       

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 February

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 2/1/2010 through 2/28/2010
   

Property Tax Filings:
     
       
No property tax returns were filed during the period 2/1/2010 through 2/28/2010.
   

Sales/Use Tax Filings:
     
       
No sales/use tax returns were filed during the period 2/1/2010 through 2/28/2010.
   

Payroll Tax Filings:
     
         
Entity
Jurisdiction
Filing Description
Due Date
Date Filed
WMI
IRS (Federal)
Withholding summary of deposits and filings (semi-weekly)
2/03/2010
2/03/2010
WMI
IRS (Federal)
Withholding summary of deposits and filings (semi-weekly)
2/19/2010
2/19/2010
WMI
Washington
Unemployment summary of deposits and filings (quarterly)
2/1/2010
2/1/2010
WMI
Washington
Labor and industries (quarterly)
2/1/2010
2/1/2010
         
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 February 28, 2010
                             
                               
Washington Mutual, Inc.
                             
                               
Vendor
 
Current *
      31 - 60       61- 90    
91 and Over
   
Total
 
                                   
Akin, Gump, Strauss, Hauer & Feld LLP
  $ 863,675.85     $ -     $ -     $ -     $ 863,675.85  
AT&T
    5,437.44       -       -       -       5,437.44  
BANG Office Interiors
    25,854.67       -       -       -       25,854.67  
Bingham McCutchen LLP / McKee Nelson LLP
    287,731.19       -       -       -       287,731.19  
Brouwer, Curt
    2,453.96       -       -       -       2,453.96  
Corporation Service Company
    1,110.44       -       -       -       1,110.44  
Davis Wright Tremaine LLP
    15,675.90       -       -       -       15,675.90  
Elliott Greenleaf
    159,653.95       -       -       -       159,653.95  
FTI Consulting, Inc.
    323,537.91       -       -       -       323,537.91  
Gibson, Dunn & Crutcher LLP
    37,986.40       -       -       -       37,986.40  
Grant Thornton
    25,503.81       -       -       -       25,503.81  
Hirata, Yana E.
    61.00       -       -       -       61.00  
John W. Wolfe, P.S.
    296,833.20                               296,833.20  
Mellon Investor Services, LLC
    3,059.50       -       -       -       3,059.50  
Miller & Chevalier Chartered
    45,455.49       -       -       -       45,455.49  
Pepper Hamilton LLP
    152,981.52       -       -       -       152,981.52  
Perkins Coie LLP
    106,287.04       -       -       -       106,287.04  
PricewaterhouseCoopers LLP
    452,888.20       -       -       -       452,888.20  
Quinn Emanuel Urquhart Oliver & Hedges
    1,025,249.48       -       -       -       1,025,249.48  
Richards, Layton & Finger P.A.
    67,797.45       -       -       -       67,797.45  
Shearman & Sterling LLP
    49,400.56                               49,400.56  
Silverstein & Pomerantz, LLP
    3,706.50                               3,706.50  
Simpson Thacher & Bartlett LLP
    8,032.00       -       -       -       8,032.00  
The Bank of New York Mellon
    5,500.00       -       -       -       5,500.00  
Thomson Reuters - Tax & Accounting
    6,859.45       -       -       -       6,859.45  
Weil, Gotshal & Manges LLP
    444,615.00       -       -       -       444,615.00  
Wu, Weijia
    1,086.34       -       -       -       1,086.34  
                                         
Total
  $ 4,418,434.25     $ -     $ -     $ -     $ 4,418,434.25  
                                         
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