After a long, more-than-three-year wait, mega-bank Washington Mutual Inc. made the "monumental achievement" of finally receiving approval of its Chapter 11 bankruptcy reorganization plan, reports Reuters.
The news probably has distressed-debt investors dancing. Washington Mutual's reorganization plan includes repay $7 billion to creditors, many of which include investors who specialize in buying securities of bankrupt companies.
It also looks like the third time is the charm - the company has attempted to exit bankruptcy proceedings twice before.
Washington Mutual’s fall represents the largest bank fail in U.S. history, according to Reuters. JP Morgan Chase & Co. bought the company from the Federal Deposit Insurance Corporation for $1.88 billion in 2008 and quickly filed the company for Chapter 11 bankruptcy protection.
A financially-struggling company will use Chapter 11 of the Bankruptcy Code to try to restructure its business in order to become profitable again - management still runs the business operations, but all business decisions must be approved by a bankruptcy court.
Just as the banks are trying to keep their heads above water, Phoenix consumers may also be struggling to overcome mounting debt in the down economy. Unfortunately, there isn’t a regulating agency like the FDIC to swoop in and rescue you completely if you fall into debt.
However, there are ways to manage your debt and legal options, such as declaring bankruptcy, if your debt load becomes too burdensome. For more information on these options, contact an experienced Phoenix bankruptcy attorney. You can also browse our Related Resources section for more general information.
Related Resources:
- Find a Phoenix Bankruptcy Attorney (FindLaw)
- Judge Approves WaMu Bankruptcy Plan (USA Today)
- Corporate Bankruptcy: What Every Investor Should Know (FindLaw)
- Kodak Chapter 11 Bankruptcy About to Develop? (Phoenix Bankruptcy Law News)
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