A tentative settlement between Washington Mutual, JP Morgan and the FDIC, may be in trouble.
Shareholders in the Seattle-based bank say they've been allowed to intervene in the case and they say they will file an objection.
Washington Mutual was one of the victims of the stock market turmoil in 2008.
The bank was bought by JP Morgan, at a very low price — a transaction overseen by the FDIC.
Several lawsuits ensued — but there are two main ones.
First, the bankruptcy proceeding. And second, Washington Mutual investors filed suit against JP Morgan and the FDIC.
A tentative settlement was recently announced in that case that cut out shareholders. But now, a leader of the shareholder group, Hans Brost, says they've been allowed to intervene.
Hans Brost: “So even thought the settlement was agreed, it is by no means final. There's going to be objections filed against it. And what we're hoping is that the judge will approve that motion to object and send them back to the negotiating table to get a better deal.”
Lawyers in the case had set next Friday to ratify the agreement.
It's now up to the judge to decide if common stock shareholders should receive money from the dissolution of the company.