On Sept. 13, Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware issued the latest opinion inIn re Washington Mutual Inc. Although the ultimate holding of the opinion – the denial of confirmation pending a court-ordered mediation – may be the takeaway point for many, those who analyze the Sept. 13 opinion further will discover newfound clarity on a number of issues. This article identifies those issues and briefly discusses the significance of the newfound clarity.

According to the opinion, disputes among the debtors, the Federal Deposit Insurance Corp. and JPMorgan Chase Bank N.A. related to ownership of assets and various claims commenced at the onset of the case. In March 2010, the debtors, JPMC, the FDIC, the Official Committee of Unsecured Creditors and other key creditors reached a global settlement agreement (GSA), which was incorporated into the sixth amended plan. After conducting confirmation hearings on the sixth amended plan, through an opinion and order issued on Jan. 7, Walrath denied confirmation. In response to the Jan. 7 opinion, among other things, the sixth amended plan was modified, resulting in the modified sixth amended joint plan of affiliated debtors (modified plan). The official committee of equity holders (equity committee) and other creditors and shareholders objected to confirmation of the modified plan.

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