Por7 Omnibus Response 0812229120213000000000027

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0003
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
---------------------------------------------------------------x
:
In re : Chapter 11
:
WASHINGTON MUTUAL, INC., et al.,
1
: Case No. 08-12229 (MFW)
:
:
Debtors. : (Jointly Administered)
:
: Hearing Date: Feb. 16, 2012 at 9:30 a.m. ET
---------------------------------------------------------------x
DEBTORS OMNIBUS RESPONSE TO
OBJECTIONS TO CONFIRMATION OF THE SEVENTH
AMENDED JOINT PLAN OF AFFILIATED DEBTORS PURSUANT
TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
Washington Mutual, Inc. (WMI) and WMI Investment Corp., as debtors and
debtors in possession (together, the Debtors), as and for their omnibus response (the Omnibus
Response) to the objections interposed to confirmation of the Seventh Amended Joint Plan of
Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated
December 12, 2011 (as it has and may be further amended, the Plan),
2
respectfully represent:
Preliminary Statement
1. The majority of stakeholders in these Chapter 11 Cases have resoundingly
voted in favor of confirmation of the Plan. As the Debtors will demonstrate at the Confirmation
Hearing, and as evidenced by the declarations filed contemporaneously herewith, the Plan
unequivocally satisfies all the requirements for confirmation set forth in chapter 11 of the
Bankruptcy Code. Upon confirmation of the Plan, the Debtors will be poised to make

1
The Debtors in these chapter 11 cases along with the last four digits of each Debtors federal tax identification
number are: (i) Washington Mutual, Inc. (3725); and (ii) WMI Investment Corp. (5395). The Debtors principal
offices are located at 1201 Third Avenue, Suite 3000, Seattle, Washington 98101.
2
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan.
0q6=,"-;6
0812229120213000000000027
Docket #9663 Date Filed: 2/13/2012

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distributions of billions of dollars and securities valued in hundreds of millions of dollars to
holders of Claims and Equity Interests.
2. Certain parties, however, seek to once again derail confirmation for their
own gain, and at the expense of all other stakeholders. Specifically, the Consortium of Trust
Preferred Securities (the TPS Consortium), together with its affiliate, the so-called TPS Group
(collectively, the TPS Family),
3
have recycled and repackaged many of their prior
objectionswhich the Bankruptcy Court already has overruled in the January Opinion, the
September Opinion and miscellaneous other ordersinto their baseless objections to
confirmation of the Plan.
3. In its objection, the TPS Consortium asks the Bankruptcy Court to re-
reconsider its prior rulings on multiple issues and argues, among other theories, that the
Bankruptcy Court has no jurisdiction to consider confirmation of the Plan, that the proposed
consensual third party releases in the Plan are impermissible, and that the proposed treatment of
holders of REIT Series is unfair. Similarly, the TPS Group asserts that the global understanding
in the Plan among the Debtors, the Equity Committee, AAOC and others, and, according to the
results of the solicitation to the Plan, something acceptable to virtually all parties but the TPS
Family, is unreasonable, that the Plan improperly releases the Debtors claims against AAOC,
and that the requested vacatur in the Plan is not allowable. Not comfortable with the Bankruptcy
Courts ruling and the similar rebuff of the United States District Court for the District of
Delaware (the District Court), the TPS Family has engaged in pre-Confirmation Hearing
skirmishing and taken its arguments to the United States Court of Appeals for the Third Circuit
(the Third Circuit). On February 10, 2012, the Third Circuit similarly denied all of the TPS

3
But for one member of the TPS Consortium who has refused to enlist with the TPS Group, the membership of both
the TPS Consortium and the TPS Group are identical.

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Familys ploys and delivered the TPS Family back to the Bankruptcy Court with the clear
admonishment to proceed with the Confirmation Hearing. A copy of the Third Circuits
summary rejection is annexed hereto as Exhibit A. As such, the Debtors and all parties in
interest are ready for the Bankruptcy Courts consideration of confirmation of the Plan.
4. For the reasons set forth herein, in the annexed chart and in the
Memorandum of Law in Support of Confirmation of the Seventh Amended Joint Plan of Affiliated
Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code (the Confirmation
Memorandum), filed contemporaneously herewith, all objections to confirmation of the Plan
should be overruled.
Background
5. On September 26, 2008, each of the Debtors commenced with the
Bankruptcy Court a voluntary case pursuant to chapter 11 of the Bankruptcy Code. As of the
date hereof, the Debtors continue to operate their businesses and manage their properties as
debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
6. On October 3, 2008, the Bankruptcy Court entered an order pursuant to
Bankruptcy Rule 1015(b) authorizing the joint administration of the Debtors Chapter 11 Cases.
On October 15, 2008, the United States Trustee for the District of Delaware (the U.S. Trustee)
appointed the Creditors Committee. On January 11, 2010, the U.S. Trustee appointed the
Equity Committee.

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The September Opinion
7. On September 13, 2011, the Bankruptcy Court entered the September
Opinion [D.I. 8612] and the September Order [D.I. 8613] (i) determining that the Bankruptcy
Court has jurisdiction to confirm and approve the Global Settlement Agreement (as defined in
the Modified Plan), (ii) reaffirming its conclusion that the Global Settlement Agreement and the
transactions contemplated therein are fair, reasonable, and in the best interests of the Debtors, the
Debtors creditors, and the Debtors chapter 11 estates, (iii) finding that the Modified Plan was
proposed in good faith, and (iv) identifying certain modifications in the Modified Plan that, if
incorporated, would render the plan confirmable under the requirements of the Bankruptcy Code.
8. Additionally, the Bankruptcy Court denied the Standing Motion with
respect to the prosecution of equitable subordination claims, but, with respect to claims for
equitable disallowance, granted the Standing Motion, staying all proceedings related to the
Standing Motion, however, pending mediation.
The Mediation
9. On October 6, 2011, the Bankruptcy Court directed the Debtors and
certain other parties in interest to mediation (the Mediation). By order, dated October 10, 2011
[D.I. 8780] (the Mediation Order), the Bankruptcy Court appointed Judge Raymond T. Lyons
of the United States Bankruptcy Court for the District of New Jersey as mediator (the
Mediator). As set forth in the Mediation Order, the following parties were eligible to
participate in Mediation: the Debtors, the Creditors Committee, the Equity Committee, AAOC,
the TPS Consortium, the TPS Group, the WMB Noteholders, Normandy Hill Capital L.P., and
Bank of New York Mellon Trust Company. In addition, the Mediation Order authorized the

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Mediator to consider and take appropriate action with respect to any matters the Mediator
deems appropriate in order to conduct the Mediation, consistent with the terms of such order.
10. The Mediation commenced on October 19, 2011. At status conferences
held on November 7, 2011, and on December 8, 2011, the Bankruptcy Court granted the
Mediators request for additional time to continue the Mediation.
4
As a result of the Mediation,
and with the assistance of the Mediator, discussions among the Debtors, the Creditors
Committee, the Equity Committee, and certain other creditor constituencies culminated in certain
modifications to the Modified Plan, which modifications are embodied in the Plan.
11. It must be noted that the Mediator has continued to provide invaluable
assistance in these Chapter 11 Cases. In that regard, the Mediator has been available at all times
since his appointment up to and including the date hereof, has provided guidance to address a
multitude of issues, both broad and granular, and continues to attempt to resolve outstanding
objections to confirmation of the Plan.
The Plan and the Disclosure Statement
12. On December 12, 2011, the Debtors filed the Plan and the Disclosure
Statement [D.I. 9179]. The Plan is premised on the Global Settlement Agreement and makes
certain changes to the Modified Plan, consistent with the September Opinion and the
negotiations between the Debtors, the Creditors Committee, the Equity Committee, and other
Creditor constituencies during the Mediation.
13. On December 12, 2011, the Debtors filed the Motion of Debtors for an
Order, Pursuant to Sections 105, 502, 1125, 1126, and 1128 of the Bankruptcy Code and

4
At each of these hearings, the TPS Consortium complained that its members were not allowed to participate in the
Mediation, but the Bankruptcy Court disregarded such complaints and ordered the Mediation to continue as the
Mediator deemed appropriate. See Hrg Tr. 11/7/2011 16:5-6, 16:14-17:5; Hrg Tr. 12/8/2011 16:23-17:6, 18:13-
14.

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Bankruptcy Rules 2002, 3003, 3017, 3018, 3019, 3020, and 9006, (I) Approving the Proposed
Disclosure Statement and the Form and Manner of the Notice of the Proposed Disclosure
Statement Hearing, (II) Establishing Solicitation and Voting Procedures, (III) Scheduling A
Confirmation Hearing, and (IV) Establishing Notice and Objection Procedures for Confirmation
of the Debtors Seventh Amended Plan [D.I. 9181] (the Disclosure Statement Motion), in
which the Debtors requested, among other things, entry of an order approving the Disclosure
Statement and establishing solicitation and voting procedures in connection with the Plan.
14. On January 11, 2012, the Bankruptcy Court held a hearing (the
Disclosure Statement Hearing) to consider, among other things, the Disclosure Statement
Motion and certain motions filed by the TPS Consortium seeking (i) a stay pending appeal of the
Bankruptcy Courts ruling in an adversary proceeding commenced by the TPS Consortium, and
(ii) separate classification of the REIT Series from all other Preferred Equity Interests. See
Motion of the Consortium of Trust Preferred Security Holders for Stay of Confirmation
Proceedings Pending Appeal, dated December 23, 2011 [D.I. 9260]; Motion of the Consortium
of Trust Preferred Security Holders to Determine Propriety of Proposed Classification of
Interests Subject to Treatment Under Class 19 of the Seventh Amended Plan of Liquidation,
dated December 23, 2011 [D.I. 9257]. Following the Disclosure Statement Hearing, the
Bankruptcy Court entered separate orders denying each of the motions filed by the TPS
Consortium. See Order Denying the Motion of The Consortium of Trust Preferred Security
Holder for Stay of Confirmation Proceedings Pending Appeal, entered January 11, 2012
[D.I. 9397]; Order Denying Motion of the Consortium of Trust Preferred Security Holders to
Determine Propriety of Proposed Classification of Interests Subject to Treatment Under Class
19 of the Seventh Amended Plan of Liquidation, entered January 11, 2012 [D.I. 9398].

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15. On January 11, 2012, the Bankruptcy Court entered an order [D.I. 9414]
(the Disclosure Statement Order) granting the Disclosure Statement Motion, including, without
limitation, approving the adequacy of the information contained in the Disclosure Statement in
accordance with section 1125 of the Bankruptcy Code, and (i) establishing certain solicitation
and voting procedures with respect to the Plan (the Solicitation Procedures); (ii) establishing
February 7, 2012 as the deadline to file objections to confirmation of the Plan (the Objection
Deadline); and (iii) scheduling the Confirmation Hearing to commence on February 16, 2012.
In addition, with respect to Disclosure Statement Objections, the Bankruptcy Court expressly
ruled that:
All Objections, responses to, and statements and comments, if
any, in opposition to the Proposed Disclosure Statement, other
than those withdrawn in their entirety prior to, or on the record at,
the Hearing, shall be, and hereby are, overruled in their entirety
for the reasons stated on the record and, notwithstanding the
foregoing, no Objection shall be considered an objection to
confirmation of the Plan unless such objection is interposed in
accordance with the procedures for objecting to confirmation of
the Plan set forth herein.
Disclosure Statement Order at 3.
Omnibus Response to Objections
16. Following the entry of the Disclosure Statement Order, certain parties
have interposed objections to confirmation of the Plan (the Objections). Attached hereto as
Exhibit B is a chart summarizing the Objections filed on or prior to the Objection Deadline,
and the Debtors responses thereto (the Omnibus Response Chart).
5
For the reasons stated

5
Certain pro se parties filed Objections (the Pro Se Objections). The Omnibus Response Chart includes the
Debtors responses to the non-duplicative Pro Se Objections. A list of the docket numbers corresponding to each of
the Pro Se Objections (if available) is annexed to the Omnibus Response Chart as Exhibit 1.

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below, in the Omnibus Response Chart and in the Confirmation Memorandum, the Objections
should be overruled in their entirety.
6

17. As noted above, the TPS Family has recycled their already-denied
objections in order to make, as it acknowledges in pleadings to, among others, the Third Circuit,
a complete record for its threatened appeal. Because of the repetitious and unfortunately
voluminous nature of such objections, the Debtors address them herein.
Objections of the TPS Consortium
18. The TPS Consortium asserts in its Objection (the TPS Consortium
Objection),
7
among other things, that (i) the Plan contains non-consensual third party release
provisions that violate sections 524(e) and 1123(a)(4) of the Bankruptcy Code; (ii) the Plan
violates the cram down requirements of section 1129(b)(2)(C) of the Bankruptcy Code;
(iii) the special distributions from JPMC to certain holders of REIT Series violate
section 1123(a)(4) of the Bankruptcy Code; and (iv) holders of preferred equity interests should
have selected the management of the Reorganized Debtors. Each of these objections fails and
should be denied.
8

6
Failure of the Debtors to address other assertions made in the Objections does not constitute a waiver of the
Debtors rights to object to such assertions at the Confirmation Hearing. The Debtors deny many of the factual and
legal assertions and characterizations contained in the Objections. Nothing contained herein shall be deemed an
admission or acceptance of any statement contained in the Objections.
7
In its Objection, the TPS Consortium incorporates by reference all of its previous pleadings. To the extent that the
Bankruptcy Court has not already overruled or disregarded any of the objections asserted by the TPS Consortium in
the foregoing pleadings, the Debtors incorporate by reference herein the Debtors responses to such objections in
their previously-filed responsive pleadings and reserve the right to further object to such objections at the
Confirmation Hearing.
8
The TPS Consortium also continues and reasserts certain other objections in a bullet list, see TPS Objection at
41, which objections are addressed in the Omnibus Response Chart.

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The Releases Set Forth in the Plan are Consensual and Permissible
19. The third party release provisions set forth in the Plan are consistent with
the Bankruptcy Code and the prior rulings of the Bankruptcy Court. See September Opinion at
99; see also Confirmation Memorandum at 44-45, 68-69. Notwithstanding that, in accordance
with the January Opinion, to be effective, the releases set forth in the Plan require affirmative
consent, the TPS Consortium contends that the releases are non-consensual. See TPS
Consortium Objection at 9. To further its contention, the TPS Consortium has conjured an
illogical fallacy by which it converts the releases in the Plan from consensual to non-consensual.
Specifically, the TPS Consortium asserts that, because the Plan conditions the receipt of
distributions upon the grant of releases, the releases are coercive and, therefore, non-consensual.
See TPS Consortium Objection at 12. Building on its fallacious argument, the TPS
Consortium further asserts that the releases in the Plan fail to meet the standard for approving
non-consensual releases.
20. As the Bankruptcy Court affirmed in the September Opinion, granting a
release is purely voluntary. A preferred shareholder who does not wish to give a release does not
have to, but will be foregoing any distribution. September Opinion at 99. Section 41.3 of the
Plan plainly excludes parties that have not affirmatively granted the proposed releases in Section
41.6 of the Plan. See Plan, 41.3 (Except as otherwise expressly provided in Sections 41.6 and
41.12 of the Plan . . . .). A stakeholderincluding a holder of Preferred Equity Intereststhat
does not elect to grant the releases in Section 41.6 of the Plan and does not receive a distribution,
is not bound by such releases. Because the releases are consensual, the standard for approval of
non-consensual releases is wholly inapplicable here. Rather, in accordance with the prior rulings
of the Bankruptcy Court, approval of the consensual third party releases in the Plan is warranted.

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See September Opinion at 99-100; January Opinion at 75-77, 83-84; In re Coram Healthcare
Corp., 315 B.R. 321, 336 (Bankr. D. Del. 2004) (stating that a plan is a contract that may bind
those who vote in favor of it. . . . [T]o the extent creditors or shareholders voted in favor of [the
Plan], which provides for the release of claims they may have against Noteholders, they are
bound by that.); In re Zenith Elecs. Corp., 241 B.R. 92, 111 (Bankr. D. Del. 1999) (approving
non-debtor releases for creditors that voted in favor of plan); U.S. Bank Natl Assn v.
Wilmington Trust Co. (In re Spansion), 426 B.R. 114, 144 (Bankr. D. Del. 2010) (recognizing
that courts have determined that a third party release may be included in a plan if the release is
consensual); see also Confirmation Memorandum at 44-45.
21. It should be noted that each member of the TPS Family has chosen to not
only vote to reject confirmation of the Plan, but also opted to not provide a release pursuant to
Section 41.6 of the Plan.
9
As such, each member of the TPS Family has exercised its discretion
and determined to forego its economic interests in the Debtors estates. Moreover, each member
of the TPS Family has affixed to its ballot an addendum (the Addendum), a copy of which is
annexed hereto as Exhibit C. Pursuant to the Addendum, the TPS Family again challenges the
Bankruptcy Courts decision in the TPS Action (as defined in the Disclosure Statement) and lays
claim to the securities which were automatically exchanged. In doing so, they purport to be
voting in protest, alleging that they are not truly part of the Chapter 11 Cases.

9
Of the $4 billion in REIT Series face amount currently outstanding, holders of REIT Series in the amount of
approximately $3,597,000,000 returned Ballots, and, within such group, holders of REIT Series in the amount of
approximately $1,822,000,000 have elected not to grant the releases set forth in the Plan. See Sharp Decl. at Exs. A,
C. Notably, in its most recent verification statement, counsel for the TPS Consortium states that its members
collectively hold REIT Series Preferred Shares in the amount of approximately $1,547,000,000. See Verified Fifth
Amended Statement of Brown Rudnick LLP and Campbell & Levine LLC Pursuant to Rule 2019 of the Federal
Rules of Bankruptcy Procedure, dated January 11, 2012 [D.I. 9384].

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The Plan Does Not Unfairly Discriminate Against the Holders of the REIT Series
22. Contrary to the assertion of the TPS Consortium, the treatment of all
Preferred Equity Interests, including the REIT Series, is consistent with the requirements of
section 1123(a)(4) of the Bankruptcy Code. The TPS Consortium alleges that the Plan violates
section 1123(a)(4) because:
the members of the TPS Consortium hold unique (to holders of
the REIT Series) direct claims against the Debtors and JPMorgan
related to the Trust Preferred Securities and the purported
exchange thereof, which they would be forced to surrender in
exchange for the same percentage of recovery as other Class 19
members who do not hold such a claim (i.e., the holders of the
Series K and Series R).
TPS Objection at 18. The TPS Consortiumwhich rejected the special distribution that JPMC
previously offeredalso contends that such distributions provide unfair treatment under
section 1123(a)(4). See TPS Objection at 29-30, 30 n.17. Neither of these objections can
survive given the rulings of the Bankruptcy Court and applicable legal precedent.
23. First, the Bankruptcy Court and all parties in interest have heard the TPS
Consortiums unique claim argument many times and, each time, it has been rejected. The
Bankruptcy Court has expressly determined that the holders of REIT Series do not possess
unique rights.
10
See Hrg Tr. 1/11/2012 94:3-11 (determining that holders of REIT Series have
the exact same rights as other holders of Preferred Equity Interests, and are not entitled to
separate classification); see also September Opinion at 4 (By separate Opinion and Order, the
[Bankruptcy] Court found that certain purported holders of the Trust Preferred Securities . . . no
longer had any interest in the TPS because their interests had been converted to interests in

10
The TPS Consortium reasserts, this time in a footnote, its erroneous belief that the purportedly unique rights of
holders of REIT Series make classification of the REIT Series with the Series K and Series R . . . inappropriate.
TPS Objection at 18 n.11 (citing its prior motion for reclassification). As noted herein, the Bankruptcy Court
already rejected the TPS Consortiums argument that it possesses unique claims and its belief that it is entitled to
separate classification.

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preferred stock of WMI. (emphasis added)). Moreover, the Bankruptcy Court already
determined that, although certain members of a class may elect not to grant the releases in a plan
in order to pursue whatever claims they may have, providing different treatment based upon
conditional releases does not violate section 1123(a)(4) of the Bankruptcy Code. See January
Opinion at 85. As the Bankruptcy Court expressly ruled:
Providing different treatment to a creditor who agrees to settle
instead of litigating is permitted by section 1123(a)(4) . . . What
is important is that each claimant within a class have the same
opportunity to receive equal treatment . . . That is the case here.
Therefore, the Court concludes that this provision of the Plan
does not violate section 1123(a)(4).
Id. at 85-86 (emphasis added) (citing In re Dow Corning Corp., 255 B.R. 445, 472 (E.D. Mich.
2000); In re Dana Corp., 412 B.R. 53, 62 (S.D.N.Y. 2008)). See also In re Resorts Intl, Inc.,
145 B.R. 412, 448 (Bankr. D.N.J. 1990) (noting that section 1123(a)(4) does not require that all
class members be treated precisely the same in all respects, but there must be an approximate
measure of equality). Here, the Plan provides all members of Class 19 with an equal
opportunity: each member can elect to grant the releases set forth in the Plan and receive a
distribution, or decline to grant the releases and retain whatever claims such member may have.
Accordingly, the proposed releases do not provide unfair treatment.
24. The TPS Consortium argues, however, that the Bankruptcy Court must
reconsider its prior ruling,
11
and find that the Plan provides for unfair treatment of holders of the

11
The Bankruptcy Court should deny the request of the TPS Consortium to reconsider its ruling regarding the
applicability of two cases the Bankruptcy Court already has found distinguishable. See TPS Consortium Objection
21 (asking the Bankruptcy Court to reconsider its determination that AOV and Conseco are distinguishable.). In
the January Opinion, the Bankruptcy Court properly concluded that, under section 1123(a)(4), the relevant inquiry is
whether each claimant or interest holder within a class has the same opportunity to receive equal treatment. See
January Opinion at 85-86 (citing Dow Corning). Although the TPS Consortium relies heavily upon the unfair
treatment ruling in In re AOV Indus., Inc., 792 F.2d 1140 (D.C. Cir. 1986), the Bankruptcy Court, like other courts,
should expressly reject that decision because of the significant flaws in AOVs reasoning. In re Dow Corning,
244 B.R. 634, 668 (Bankr. E.D. Mich. 1999) (Dow Corning I). In fact, the bankruptcy court in Dow Corning I
laid out several reasons why the AOV ruling should not be followed, including, among others, that such ruling

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REIT Series because such holders are forced to relinquish unique rights. The TPS Consortium
specifically contends that, unlike other holders of Preferred Equity Interests in Class 19, holders
of the REIT Series must release their unique claims in order to receive the same recovery as
other class members.
12
TPS Consortium Objection at 18. As explained above, the Bankruptcy
Court already has indicated that holders of REIT Series do not possess any rights in the Trust
Preferred Securities and, therefore, do not possess unique claims. Moreover, each holder of
REIT Series, like all other holders of Preferred Equity Interests, has the option to elect to grant a
release of its claims and receive a distribution. Accordingly, the Plan does not provide unfair
treatment.
25. Second, the TPS Consortiums allegation that the special distributions
from JPMC provide unfair treatment under section 1123(a)(4) of the Bankruptcy Code is invalid
on its face because special distributions of funds that do not belong to the Debtors estates are
not subject to the requirements of section 1123(a)(4). Here, JPMC, and JPMC alone, is funding
the special distribution to certain holders of REIT Seriessuch funds are not part of the Debtors

(i) disregards the express language of section 1123(a)(4), (ii) would render the construction of convenience classes
impossible, which would be bad public policy and contrary to the Bankruptcy Code, and (iii) sets forth a test of
such impractical rigidity that it will be unworkable any time there is a class containing disputed and unliquidated
claims. Id. at 667-69; see also Dow Corning, 255 B.R. at 445 (agreeing with the [b]ankruptcy [c]ourts conclusion
that the reasoning in [ ] AOV regarding equal treatment within a class should be rejected).
12
To prop up its specious argument, the TPS Consortium cites decisions that provide scant support because such
cases are wholly off-point. See, e.g., TPS Consortium Objection at 17 (citing Finova Grp., Inc. v. BNP Paribas (In
re Finova Grp., Inc.), 304 B.R. 630, 636 (D. Del. 2004) (ruling that, under a plan that distributed interest to members
of a class, it was appropriate to pay some but not all members additional utilization fees because others had
included those fees as a component of their interest rates, and stating that [t]he requirements of Section 1123 do not
require the parties to receive equal payment, and the Court does not read the Bankruptcy Courts ruling to require
equal payment.); In re Modern Steel Treating Co., 130 B.R. 60, 64 (Bankr. N.D. Ill. 1991) (ruling that unequal
treatment would occur if one shareholder in a class obtained the shares owned by certain other equity holders in the
same class without any consideration)). Moreover, the ruling in In re W.R. Grace & Co. in no way bolsters the TPS
Consortiums argument because, in that decision, the court rejected the assertion by one creditor that it held unique
claims and therefore was providing more consideration than other members of its class. See In re W.R. Grace &
Co., No. 11-199, 2012 WL 310815, at *55 (D. Del. Jan. 30, 2012). Additionally, the Grace court expressly stated
that perfect or precise equality is not requiredonly approximate equality. Id. at 47. Here, all holders of Equity
Interests in Class 19 are receiving the same treatment: the opportunity to receive a distribution in exchange for
whatever claims they may have. Consistent with the January Opinion, such treatment satisfies section 1123(a)(4) of
the Bankruptcy Code.

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estates. See Hrg Tr. 3/21/2011 55:14-19 (explaining that the special distribution is a payment
that [JPMC] was making, its not coming from the [D]ebtors). Certain holders of the REIT
Seriesincluding the TPS Consortiumelected not to participate in the special distribution
from JPMC, and to pursue litigation against JPMC instead. The TPS Consortium failed to
prevail in its litigation. Presumably, now (and as evidenced by its efforts at the hearing to
consider the disclosure statement with respect to the Modified Plan) it seeks to receive a portion
of the special distribution provided by JPMC. JPMC has declined to re-offer the special
distribution to any holders of REIT Series that failed to agree to the conditions for the special
distribution. See id. at 55:23-24. Consequently, by electing to pursue litigation with JPMC, and
voting against the Sixth Amended Plan (as defined in the Disclosure Statement), the TPS
Consortium has foreclosed its ability to receive a special distribution from JPMC. See Hrg Tr.
3/21/2011 56:12-14. Although certain holders of REIT Series will receive a special distribution
from JPMC, and not the Debtors estates, such payment does not constitute unfair treatment.
Rather, the Plan provides equal treatment consistent with the requirements of section 1123(a)(4)
of the Bankruptcy Code, and the prior rulings of the Bankruptcy Court, and merely facilitates the
distribution of additional consideration.
The Bankruptcy Code Requirements for Cram Down are Satisfied
26. The Plan complies with the cram down requirements set forth in the
Bankruptcy Code. See Confirmation Memorandum at 79-86. With respect to the cram down of
equity interests, section 1129(b)(2) provides, among other things, that:
(2) For the purpose of this subsection, the condition that a plan be
fair and equitable with respect to a class includes the following
requirements:
***
(C) With respect to a class of interests

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(i) the plan provides that each holder of an interest of such class
receive or retain on account of such interest property of a value,
as of the effective date of the plan, equal to the greatest of the
allowed amount of any fixed liquidation preference to which such
holder is entitled, any fixed redemption price to which such
holder is entitled, or the value of such interest; or
(ii) the holder of any interest that is junior to the interests of such
class will not receive or retain under the plan on account of such
junior interest any property.
11 U.S.C. 1129(b)(2). The Plan properly provides for the distribution of value to holders of
Equity Interests in accordance with section 1129(b)(2) of the Bankruptcy Code. See
Confirmation Memorandum at 79-86. The TPS Consortium contends, however, that the Plan is
not confirmable because it provides for distributions to Class 21 and Class 22. The TPS
Consortiums argument fails.
27. First, the proposed treatment of Dime Warrants in Class 21 accords with
the terms of the settlement among the Debtors and the class representatives for the holders of
Dime Warrants, embodied in that certain Stipulation and Agreement Between the Debtors and
Class Representatives of the LTW Holders Resolving Adversary Proceeding and the LTW Proofs
of Claim, dated January 11, 2012 (the Dime Warrant Stipulation), which the Bankruptcy Court
already has approved by order, entered February 13, 2012 [D.I. 9649], and to which the TPS
Consortium did not object. Specifically, the Allowed Claims of holders of Dime Warrants are
claims within Classes 12 ($9 million), 18 ($10 million) and 22 (8.77% of the Reorganized
Common Stock distributed to holders of Common Equity Interests). As such, there is no
distribution being made within Class 21 itself.
28. Second, equitable considerations dictate that the Bankruptcy Court should
approve the proposed allocation of Reorganized Common Stock. As discussed more fully in the
Confirmation Memorandum, Class 19 only narrowly voted to reject the Plan. See Confirmation

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Memorandum at 83. In fact, the percentage of the Class voting to accept is only slightly less
than the two-thirds required under the Bankruptcy Code. As noted above, a very large
percentage of the votes to reject, and an even larger percentage of the elections to opt out of
granting the releases, were cast by members of the TPS Consortium. See supra note 9. With
respect to their interests in Class 19, the Debtors believe that the members of the TPS
Consortium voted against the Plan and opted out of the non-debtor releases contained in Section
41.6 of the Plan. Consequently, it is clear that the TPS Consortium members have waived any
economic interest in the Debtors estates and, it raises the question as to whether their solicitation
responses have been tendered in good faith, notwithstanding the equities of these Chapter 11
Cases (or the fact that the TPS Family purchased their respective interests in the secondary
market for cents-on-the-dollar). Thus, the Debtors reserve the right to designate the Class 19
votes of the TPS Consortium and the TPS Group.
29. Lastly, even if the proposed allocation set forth in the Plan were not
adopted by the Bankruptcy Court, consistent with the requirements of the Bankruptcy Code, the
Plan provides for the allocation of Reorganized Common Stock to Classes junior to Class 19
subject to the discretion of the Bankruptcy Court. See Plan, 24.1, 25.1. In other words, the
Plan contemplates that holders of Preferred Equity Interests in Class 19 may receive all
distributions made on account of Equity Interests. On the other hand, the Bankruptcy Court may
exercise its judgment, in light of the foregoing equitable considerations, and approve the
proposed allocation. In any event, the terms of the Plan, as approved by the Bankruptcy Court,
are fair and equitable with respect to all Classes and, therefore, should be confirmed.

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Proposed Governance of the Reorganized Debtors Satisfies the Bankruptcy Code
30. The proposed governance of the Reorganized Debtors, Trust Advisory
Board and the Litigation Subcommittee is consistent with the requirements of section 1129(a)(5)
of the Bankruptcy Code. See Confirmation Memorandum at 61-64. Additionally, the
establishment and composition of the foregoing governance entities reflect the understanding
reached as a result of the negotiations amongst the Debtors, the Debtors, the Creditors
Committee, the Equity Committee, AAOC and certain other stakeholders. The TPS Consortium
claims, however, that:
holders of preferred equity should be allowed to choose those
who would serve on the [Reorganized Debtors] board, the Trust
Advisory Board and the Litigation Subcommittee. To do so
would be consistent with the requirement that post-emergence
governance reflect the interests of those who have an economic
stake in the enterprise.
TPS Objection at 31-35. According to the TPS Consortium, the nominees of the Equity
Committee are not a substitute or proxy for the ability of preferred equity interests to select
board members.
31. The TPS Consortiums allegation that the Equity Committee is not suited
to represent all holders of Equity Interests rings hollow. The Bankruptcy Court has previously
ruled that the Equity Committee adequately represents the interests of holders of both Preferred
Equity Interests and Common Equity Interests. See Hrg Tr. 1/28/2010 60:12-14 (finding that,
under this case . . . theres certainly sufficient representation of the preferreds on the existing
Equity Committee); see also Order Denying (I) Debtors Motion for an Order Disbanding the
Official Committee of Equity Holders Appointed by the United States Trustee and (II) Black
Horses Motion to Reconstitute the Equity Committee, entered February 8, 2010 [D.I. 2378].
Indeed, at every turn, in every discussion, the Equity Committee has steadfastly asserted the

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rights and interests of holders of all Equity Interests.
13
Therefore, the Equity Committee is the
proper fiduciary to select representatives on behalf of Equity Interests holders, including holders
of Preferred Equity Interests and Common Equity Interests alike. To the extent that the TPS
Consortium disputes the validity of the particular nominees selected by the Equity Committee,
the TPS Consortium should raise such concerns with the Equity Committee and not as an
objection to confirmation of the Plan.
32. Moreover, the individuals selected by the Equity Committee for the Trust
Advisory Board not only represent the interests of all Equity Interest holders, but also are
qualified to oversee the Liquidating Trust. The Equity Committee has selected Michael
Willingham, the current chair of the Equity Committee, who has zealously advocated for all
Equity Interests throughout these cases, to continue to represent such interests on the Trust
Advisory Board. The Honorable Douglas Southard, a former California state court judge and a
Preferred Equity Interest holder, clearly represents the interests of such holders. Moreover, each
member of the Trust Advisory Board shall have a fiduciary duty to act in the best interests of the
Liquidating Trust Beneficiaries, including, without limitation, the holders of Preferred Equity
Interests. Thus, each of the individuals selected by the Equity Committee is fully qualified to
represent the interests of all Preferred Equity Interest holders and serve on the Trust Advisory
Board.
33. Likewise, the Equity Committees appointees to the board of directors for
the Reorganized Debtors will represent the interests of all holders of Reorganized Common
Stock. Together, the directors selected by the Equity Committee have considerable business
management experience in multiple disciplines, including, among other areas, finance and
accounting, governance, and mergers and acquisitions. See Plan Supplement, Ex. E.

13
Notably, a majority of the members of the Equity Committee are holders of Preferred Equity Interests.

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Additionally, as members of the board of directors, each of the individual appointed by the
Equity Committee will have a duty to maximize the value of Reorganized Common Stock for the
benefit of the holders thereof, including, among others, the current holders of Preferred Equity
Interests. Accordingly, there can be no dispute that interests of holders of Preferred Equity
Interests are adequately represented by the directors selected by the Equity Committee.
Moreover, because the members of the TPS Consortium have voluntarily foregone their
distributions of Reorganized Common Stock, they lack standing to object to the governance of
the Reorganized Debtors or the composition of its board.
Objections of the TPS Group
34. The Objection of the TPS Group (the TPS Group Objection) rests on
two patently false premises: (i) the global understanding among AAOC, the Debtors, the
Creditors Committee and the Equity Committee that compromises, among other things, claims
against AAOC, is not fair and reasonable because the Debtors and the Equity Committee are
unsure of the claims being compromised, and (ii) AAOC provides no consideration for the
understanding. Contrary to the TPS Groups assertion, the Debtors have repeatedly stated in
their filings that they believe these claims provide no value to the Debtors estates. See, e.g.,
Debtors Objection to Motion for an Order Authorizing the Official Committee of Equity
Security Holders to Commence and Prosecute Certain Claims of Debtors Estates, dated
August 10, 2011 [D.I. 8424]. Indeed, it is for this very reason that the Equity Committee filed
the Standing Motion and the Bankruptcy Court even considered it. Conversely, the Equity
Committee has stated that it believes such claims could be worth up to $2 billion, assuming all
claims by AAOC are disallowed. In response to these widely varying positions, the Bankruptcy
Court directed certain parties to participate in the Mediation to, among other things, explore a

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possible settlement of the Standing Motion in order to avoid a litigation morass, see September
Opinion at 138, and stayed all proceedings related to the Standing Motion pending the
Mediation. At bottom, there is no exact value of the claims being asserted against AAOC, none
can be derived prior to conclusion of a trial on the merits, and the Debtors are not required (nor is
it possible) to provide an exact value of any claims, including potential claims against AAOC, at
this time.
35. Vast amounts of information concerning the claims being compromised
and the parties positions with respect thereto have been made available for the Bankruptcy
Court to assess the reasonability of the proposed settlement. Despite the TPS Groups
demonstrably false statement that the parties agree [the record] is devoid of evidence
concerning the value of the claims being compromised, TPS Group Objeciton 26, the
Bankruptcy Court spent approximately four days hearing testimony concerning the claims
against AAOC. The record, as it relates to this matter, is comprehensive. Indeed, the
Bankruptcy Court has already alerted all parties to its position:
I think the standard is the settlement standard and quite frankly
we did have a lot disclosed at the prior confirmation hearing. I
think the issues, both the claims and the defenses raised, were
described in detail. . . . [and] theres been plenty written about the
claims, I think, and I dont think anything more is necessary.
Hrg Tr. 1/11/2012 at 144:12-145:3. Accordingly, the TPS Groups pronouncement that the
current evidentiary record is woefully insufficient for the Bankruptcy Court to make a reasoned
assessment of the probability of success of the inequitable conduct claims against [AAOC], has
already been rejected by the Bankruptcy Court.
36. Moreover, in asserting that AAOC pays nothing for the settlement, the
TPS Group ignores the reality that the Plan embodies the global resolution reached by the
Debtors, the Equity Committee, the Creditors Committee and certain creditor groups pursuant to

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the Mediation. Among other things, the resolution (i) releases the claims asserted by the
Standing Motion against AAOC in exchange for certain consideration, including, inter alia,
subject to the Reorganized Debtors right to seek financing on better terms, a $125,000,000
credit facility for the Reorganized Debtors, and the agreement to backstop the Runoff Notes
election so that there is certainty that $10 million in principal amount of Runoff Notes will be
contributed to Reorganized WMI, (ii) provides certain consideration in the form of, inter alia, a
$75 million cash infusion to the Reorganized Debtors by the holders of Allowed Senior Notes
Claims and Allowed Senior Subordinated Notes Claims, in exchange for releases of the creditor
groups providing such consideration, and (iii) provides for those current holders of WMI Equity
Interests that elect to grant the releases set forth in the Seventh Amended Plan to receive
distributions of Reorganized Common Stock. As importantly, the resolution stops the clock on
the accrual of interest and expenses and allows the Debtors to distribute greater value to their
constituents.
37. Likewise, the releases to be granted to AAOC are proper and not an
impediment to confirmation of the Plan, as the TPS Group erroneously argues. Bankruptcy
courts consider the following factors, known as the Master Mortgage factors, to determine
whether a release by a debtor should be approved: (i) whether there is an identity of interest
between the debtor and the third party, such that a suit against the non-debtor is, in essence, a
suit against the debtor or will deplete assets of the estate; (ii) whether the non-debtor has made a
substantial contribution of assets to the reorganization; (iii) the essential nature of the release to
the reorganization to the extent that, without the release, there is little likelihood of success;
(iv) an agreement by a substantial majority of creditors to support the release, specifically if the
impacted class or classes overwhelmingly vote to accept the plan; and (v) whether there is a

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provision in the plan for payment of all or substantially all of the claims of the class or classes
affected by the release. In re Master Mortgage Inv. Fund, Inc., 168 B.R. 930, 937 (Bankr. W.D.
Mo. 1994); see also Spansion, 426 B.R. at 143 n.47. Importantly, a court need not find that all of
the Master Mortgage factors apply to approve a debtors release of claims against non-debtors.
Zenith Elecs. Corp., 241 B.R. at 110 (citing Master Mortgage, 168 B.R. at 935).
38. Here, the proposed AAOC releases in Section 41.5 of the Plan meet the
Master Mortgage factors because (i) such releases are essential to the Debtors reorganization
pursuant to the Plan, (ii) the $75 million contribution is a substantial contribution to Reorganized
WMI, (iii) AAOC is providing a $125 million credit facility to Reorganized WMI and
backstopping the Runoff Notes election, and (iv) the Equity Committee and the Creditors
Committee, along with nearly all impaired classes, overwhelmingly support the Plan.
39. The TPS Groups argument that the Bankruptcy Courts previous ruling
on this matter precludes any releases to AAOC is unfounded and ignores that AAOC is now
contributing substantial value to the reorganization. In the January Opinion, the Bankruptcy
Court explained that AAOC could not be granted releases by the Debtors because AAOC did not
contribute cash or anything else of a tangible value to the [Sixth Amended] Plan or to creditors
nor provide[] an extraordinary service that would constitute a substantial contribution to the
[Sixth Amended] Plan or case. See January Opinion at 68. Under the previous reorganization
plans, although AAOC assisted in the Global Settlement Agreement and, as found by the
Bankruptcy Court, helped to increase the Debtors estates, see September Opinion at 71,
AAOC did not provide direct monetary value to the Debtors estates. In contrast, as embodied in
the Plan, the current settlement with AAOC provides tangible value and substantially contributes
to the Debtors estates. Without the contributions made by AAOC, thousands of Equity Interest

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holders who are slated to receive a recovery under the Plan would otherwise receive nothing.
Accordingly, the proposed releases meet the Master Mortgage factors.
40. Last, the TPS Group asserts that there are no exceptional circumstances
justifying the requested vacatur of certain sections of the September Order and the September
Opinion.
14
The TPS Groups objection largely repeats its prior objection to the Debtors
Disclosure Statement and its opposition to the Debtors request that the Bankruptcy Court certify
to the District Court its inclination to vacateboth of which the Bankruptcy Court overruled.
For example, the TPS Group once again claims a public interest in the Bankruptcy Courts
opinion as precedent, but the Bankruptcy Court has already correctly determined that, because
the portions of the September Order and September Opinion to be vacated were not on the
merits of the equity committees claim, but more akin to the ruling on a preliminary injunction
as was in [Major League Baseball Props., Inc. v. Pac. Trading Cards, Inc., 150 F.3d 149 (2d Cir.
1998)], see Hrg Tr. 1/25/2012 48:16-22, the precedential value is not high. Id. at 49:4. And,
while the public may rely on court decisions, the public really [relies] on cases that have been
issued only after a full airing of the issues, a full trial on the merits. Id. at 49:19-22. Here,
however, the relevant portion of the September Order and the September Opinion undoubtedly
lacks those elements. Id. at 49:21-22. Moreover, the Bankruptcy Court noted that vacatur
does not eliminate the courts reasoning or thought process or the press that already has been
garnered in connection with my decision. Id. at 49:5-9.
41. The TPS Group also, yet again, distorts the settlement as belonging solely
to AAOC, ignoring that the Debtors, as fiduciaries for their estates and as the proponents of the
Plan, are the parties requesting vacatur in furtherance of a complex, multi-party agreement that

14
On February 9, 2012, the District Court entered an Order, a copy of which is annexed hereto as Exhibit D,
remanding the appeals commenced by AAOC, the Debtors, and other parties in interest, to enable the Bankruptcy
Court to consider vacatur of certain sections of the September Opinion and the September Order.

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not only resolves a number of previous obstacles to confirmation, but also, provides for a
recovery by equity that previously has been unattainable. They also ignore that the settlement
was reached during the mediationordered by the Bankruptcy Courtto resolve, among other
things, the Standing Motion. September Opinion at 138. The TPS Group persists in
perpetuating fictions about vacatur merely enabling AAOC to undo prior litigation choices, see
TPS Group Objection 43, ignoring that the settlement is not a routine agreement between two
parties, but rather, the product of more than three years of contentious litigation involving a wide
array of stakeholders in these bankruptcy proceedings arising from the largest bank failure in
U.S. history.
42. Moreover, as the Bankruptcy Court observed, there is a strong public
policy in bankruptcy cases to encourage settlement, Hrg Tr. 1/25/2012 49:23-24, and that
policy is magnified by the historic circumstances of these cases. Concluding protracted and
contentious litigation in a bankruptcy of this magnitude furthers not only the interests of the
multiple parties involved, but also the public interest and public policy in general. See Freedom
Wireless, Inc., v. Boston Commcns Group, Inc., 2006 WL 4451477, at *2 (D. Mass. Oct. 11,
2006) (Global settlement of several complex, multi-party lawsuits will conserve this Courts
and the parties time, money, and other resourcesall in furtherance of the public interest.).
Public policy also favors speedy distributions of more than $7 billion to creditors and other
stakeholders who have already waited over three years and who should not have to endure many
more years of litigation that will not only further delay, but erode (or eliminate entirely) their
recoveries.
43. In opposing vacatur, the TPS Group cites inapposite cases in which courts
declined to vacate opinions based on the mere fact of settlement and nothing more, or in

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circumstances in which no exceptional circumstances had not been shown. And, the TPS Group
ignores the multitude of cases in which courts have found that exceptional circumstances did in
fact warrant vacatur in aid of settlement, precisely as they do here. See, e.g., McKinney v.
Philadelphia Hous. Auth., No. 07-4432, 2010 WL 2510382, at *2-4 (E.D. Pa. June 16, 2010)
(finding vacatur warranted when the negative effects of vacating in this case [we]re relatively
minor and the positive effects substantial; the opinion in question was fact-specific with limited
precedential effect; vacatur would be both helpful and harmful to the movant; vacatur would
promote the immediate conservation of judicial resources; and denying vacatur would
jeopardize the settlement, thereby depriving the plaintiff of money she desperately needed);
Freedom Wireless, 2006 WL 4451477, at *2 (finding vacatur warranted in connection with
global settlement of several complex, multi-party lawsuits that would conserve litigant and
judicial resources and further the public interest). Indeed, courts have undeniably been more
flexible where vacatur would bring an end to the tortured history of a litigation, as it would in
the context of the Debtors bankruptcy cases. Tommy Hilfiger Licensing, Inc. v. Costco Cos.,
99-3894, 2002 WL 31654958, at *3 (S.D.N.Y. Nov. 25, 2002); see also BMC, LLC v. Verlan
Fire Ins. Co., 04-0105A, 2008 WL 2858737, at *2 (W.D.N.Y. July 22, 2008) (granting a motion
for partial vacatur after noting the long and tortured history of the case and finding exceptional
circumstances because, among other reasons, allowing vacatur in this case would allow the
Bankruptcy Court and the parties to avoid the further expenditure of valuable time and
resources).
44. Here, exceptional circumstances are indeed present. If the requested
vacatur is granted (and the Plan is consummated), many stakeholders will receive sizeable
recoveries in connection with their claims. Indeed, pursuant to the Plan, Preferred Equity

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Interest holders of WMI are slated to receive substantially all of the new equity of reorganized
WMIwhich would not be possible absent the settlement embodied in the Debtors Plan. The
prospect of distributions to literally thousands of shareholders, in a case in which the existence of
any equity value is hotly disputed, in and of itself, is an exceptional circumstance that, among
others, warrants vacatur.
45. Most notably, absent the requested vacatur, the accompanying collapse of
the Plan could result in the termination of the Global Settlement Agreement,
15
which would
mean the loss of billions of dollars in recoveries (in exchange for litigation that the Bankruptcy
Court has already determined would be challenging). Clearly, such a proposition is exceptional,
as reflected by all of the September Appellants
16
support of the requested vacatur and by the
agreement of all of the September Appellants to dismiss their appeals of the September Order
and September Opinion if the Bankruptcy Court confirms the Plan and grants the vacatur.
46. The failure to obtain vacatur will have dire consequences for the Debtors
estates, their creditors, and their shareholders. It will cause the needless incurrence of expenses
and further dilute or entirely evaporate the recoveries of junior creditors due to the ongoing
accrual of postpetition interest. See Goulding Decl. at 23. Indeed, the Bankruptcy Court
previously found that the financial harm to all the other creditors and stakeholders in this case
from further delay would be enormous. Hrg Tr. 1/11/2012 72:10-15.

15
Currently, the Global Settlement Agreement becomes terminable by any party on February 21, 2012. There is no
guaranteeing that the FDIC and JPMC will continue to believe it to be in their respective best interests to continue to
be parties to the Global Settlement Agreement and, on that basis, the risk of the settlements and compromises
represented thereby being lost cannot be diminished.
16
September Appellants means the following parties who filed notices of appeal or cross-appeal from the
September Order and September Opinion: the Debtors, the Equity Committee, the Creditors Committee, Aurelius,
Appaloosa, Owl Creek, Centerbridge, the WMB Noteholders, Normandy Hill Capital L.P., and Wells Fargo Bank,
National Association.

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47. The failure to obtain vacatur also will impose ongoing, substantial burdens
on the judicial resources of both the Bankruptcy Court and the District Court, as the pending
appeals will be required to continue, rather than be dismissed, with prejudice, pursuant to the
Settlement.
48. Without the requested vacatur, the case will devolve into a litigation
morass as the Bankruptcy Court noted with respect to the Standing Motion and the need for
Mediation. September Opinion at 138. On the other hand, the settlement that resulted from that
Mediation, and provides for vacatur, will avoid this litigation morass, id., and, notably,
conserve not only estate resources, but also judicial resourcesboth of which qualify as
exceptional circumstances. BMC, 2008 WL 2858737, at *2; accord Tommy Hilfiger, 2002
WL 31654958, at *3.
49. Finally, unable to overcome the exceptional reality of these bankruptcy
proceedings, the TPS Group also claims that the Bankruptcy Court improperly relied on Rule
60(b)(6) of the Federal Rules of Civil Procedure, rather than looking solely to the analysis in
U.S. Bancorp Mortg. Co v. Bonner Mall Pship, 513 U.S. 18 (1994), in which the Supreme Court
considered an appellate courts authority under 28 U.S.C. 2106 to vacate a lower courts
opinion. As the TPS Group concedes, however, both approaches condition vacatur in
furtherance of settlement on the existence of exceptional circumstances. See TPS Group
Objection 25, 48. Therefore, the Bankruptcy Court correctly characterized this issue as
presenting a distinction without a difference. Hrg Tr. 1/25/2012 47:25.
17
Exceptional

17
Some circuits have held that vacatur under Rule 60(b), as opposed to 28 U.S.C. 2106, does not even require
exceptional circumstances. See Marseilles Hydro Power LLC, 481 F.3d 1002, 1004 (7th Cir. 2006); American
Games, Inc. v. Trade Prods., Inc., 142 F.3d 1164 (9th Cir. 1997). The Bankruptcy Court, however, analyzed vacatur
under the more stringent exceptional-circumstances standard, whether viewed through the lens of Rule 60(b)(6) or
Bonner Mall. Contrary to the TPS Groups objection, therefore, the Bankruptcy Courts vacatur analysis plainly
satisfies the Bonner Mall standard the TPS Group advocates.

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circumstances surrounding these bankruptcy proceedings and the Plan warrant vacatur under any
analytical framework, and the TPS Groups objection presents no legal or factual obstacle to
confirmation.
18

18
Straining for another ground to object, the TPS Group argues that Rule 60(b)(6) applies only to final judgments,
and the Standing Motion Ruling is interlocutory. See TPS Group Objection 46 n.16. First, as the Debtors, among
others, have previously argued, the Standing Motion Ruling is final and appealable as of right. See Official Comm.
of Unsecured Creditors of Life Serv. Sys., Inc. v. Westmoreland County MH/MR, 183 F.3d 273, 277 (3d Cir. 1999)
(stating that the most important factor a court should consider in determining if a decision is final for purposes of
an appeal is the impact on the assets of the estate). Notably, resolution of the Standing Motion will have a major
impact on the assets of the estate as the Standing Motion concerns approximately $2 billion in Claims. Second, even
if the Standing Motion Ruling were non-final, that would not advance the TPS Groups cause, because courts have
determined that Bonner Malls exceptional circumstances standard does not even apply when a trial court vacates
a non-final order in furtherance of settlement. See, e.g., Dana v. E.S. Originals, Inc., 342 F.3d 1320, 1327-28 (Fed.
Cir. 2003) (Dyk, J., concurring) (observing that Bonner Mall does not prevent a district court from vacating non
final orders pursuant to a settlement agreement); Circle K Corp. v. United States, No. 12-86 T, 1996 WL 904545, at
*1 (Fed. Ct. Claims Dec. 9, 1996) (concluding that because the orders at issue in the parties joint motion do not
yield an entry of judgment, the holding of U.S. Bancorp is inapplicable).
In suggesting, further, that a more stringent standard than exceptional circumstances governs all non-final rulings,
the TPS Group relies on a facially inapplicable provision, Federal Rule of Civil Procedure 54(d) [sic] (presumably
54(b)). See TPS Objection 46 n.16. Rule 54(b) applies to motions to reconsider orders that fully adjudicate[ ]
one claim in a multi-claim complaint while leaving other claims to be resolved through further proceedings. See
Fed. R. Civ. P. 54(b). The rule has no application to the Standing Motion Rulingwhich, as the Bankruptcy Court
already has expressly found, was not on the merits and thus did not fully adjudicate any claim for equitable
disallowance. Hrg Tr. 48:16-49:22. Moreover, as the Bankruptcy Court already observed, vacatur in furtherance of
settlement does not require reconsideration of the Standing Motion Ruling. See id. 46:23-25 ([I]f the court does in
fact vacate the order, the trial court is not reversing itself.). Tellingly, not one of the Rule 54(b) reconsideration
cases that the TPS Group cites has anything to do with vacatur in connection with settlement, much less discusses
the standard applicable thereto. See TPS Objection 46 n.16 (citing Cataldo v. Moses, 361 F. Supp.2d 420 (D.N.J.
2004) (vacating order dismissing New Jersey Tort Claims Act claims in light of intervening New Jersey Supreme
Court decision and then declining to exercise supplemental jurisdiction over claims); Calyon N.Y. Branch v. Am.
Home Mortg. Corp., 383 B.R. 585 (Bankr. D. Del. 2008) (declining to reconsider and revise findings of fact and
conclusions of law entered in first phase of adversary proceeding, in which additional claims remained to be
adjudicated); Castrillo v. Am. Home Mortg. Serv. Inc., No, 09-4369, 2010 WL 1424398, at *4 (E.D. La Apr. 5,
2010) (declining to reconsider dismissal of fraud claims for failure to plead detrimental reliance)).
WHEREFORE the Debtors respectfully request entry of an order (i) overruling
the Objections, (ii) confirming the Plan, and (iii) granting the Debtors such other and further
relief as the Bankruptcy Court may deem just and appropriate.
Dated: Wilmington, Delaware
Febtuary 13, 2012
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RLF I 5828686v. 1
Mark D. Collins (No. 2981)
Michael J. Merchant (No. 3854)
Travis A. McRoberts (5274)
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 Nmih King Street
Wilmington, Delaware 19801
Telephone: (302) 651 -7700
Facsimile: (302) 651 -7701
-and-
Brian S. Rosen, Esq.
WElL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Attorneys for Debtors
and Debtors in Possession
29

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RLF1 5828686v. 1
EXHIBIT A
Third Circuit Decision
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
February 6, 2012

Panel No. BCO-057-E
Panel No. BCO-058-E

No. 12-1263

Washington Mutual, Inc., et al,
Debtors

Black Horse Capital Master Fund Ltd; Black Horse Capital (QP) LP; Greywolf
Capital Partners II; Greywolf Overseas Fund; Guggenheim Portfolio Company
VII, LLC: HFR RVA Combined Master Trust ; IAM Mini-Fund 14 Limited; LMA
SPC; Lonestar Partners LP;
Mariner LDC; Nisswa Convertibles Master Fund Ltd; Nisswa Fixed Income
Master Fund Ltd; Nisswa Master Fund Ltd; Paige Opportunity Partners LP; Paige
Opportunity Partners Master Fund; Pandora Select Partners, LP;
Pine Edge Value Investors Ltd; Riva Ridge Capital Management LP; Riva Ridge
Master Fund Ltd.; Scoggin Capital Management II LLC; Scoggin International
Fund Ltd.; Scoggin Worldwide Fund Ltd.; Visium Global Fund Master Fund, Ltd;
VR Global Partners LP.; Whitebox Asymmetric Partners, LP; Whitebox Combined
Partners, LP; Whitebox Combined Partners, LP; Whitebox Convertible Arbitrage
Partners, LP; Whitebox Hedged High Yield Partners, LP;
Whitebox Special Opportunities Fund LP, Series B,

v.

JP Morgan Chase Bank, N.A., JP Morgan Chase & Co; Washington Mutual, Inc;
Washington Mutual Preferred Funding, LLC; Washington Mutual Preferred
Funding (Cayman) I Ltd, LLC; Washington Mutual Preferred Funding Trust I;
Wilmington Trust Company; Washington Mutual Preferred Funding Trust II:
Wilmington Trust Company; Washington Mutual Preferred Funding Trust III:
Wilmington Trust Company;
Washington Mutual Preferred Funding Trust IV: Wilmington Mutual Trust
Company; Washington Mutual Preferred Funding

Black Horse Capital, LP; Black Horse Capital Master Fund Ltd,; Greywolf Capital
Partners II, LP; Pines Edge Value Investors, Ltd.; Pine River Convertibles Master
Case: 12-1263 Document: 003110806602 Page: 1 Date Filed: 02/10/2012
2

Fund Ltd, (f/k/a Nisswa Convertibles Master Fund Ltd.); Pine River Fixed Income
Master Fund Ltd. (f/k/a/ Nisswa Fixed Income Master Fund Ltd.);
Pine River Master Fund Ltd. (f/k/a/Nisswa Master Fund, Ltd.); LMA SPC for and
on behalf of the Map 89 Segregated Portfolio; Scoggin Worldwide Fund, Ltd.;
Scoggin Capital Management II LLC: Scoggin International Fund Ltd.; Visium
Global Master Fund, Ltd; VR Global Partners, L.P.,
Appellants
(D. Del. No. 1-11-cv-00124)

1. Motion by Appellants for Expedited Review and to Stay the Bankruptcy
Plan Confirmation Hearing;

2. Clerks submission for possible dismissal due to jurisdictional defect;

3. Response by Appellants In Support of Jurisdiction;

4. Response by Appellee Washington Mutual, Inc. in Opposition to Motion
for Expedited Review and to Stay Bankruptcy Plan Confirmation Hearing;

5. Corrected Response by Appellee Washington Mutual to Clerks order
dated 2/02/12 advising of possible dismissal due to lack of jurisdiction;

6. Joinder by Appellee JP Morgan Chase Bank N.A to Washington Mutual,
Incs Response to Clerks order dated 2/02/12 advising of possible
dismissal due to lack of jurisdiction;

7. Joinder filed by Appellee JP Morgan Chase Bank NA to Washington
Mutual Inc.s Response in Opposition to Motion for Expedited Review and
to Stay the Bankruptcy Plan Confirmation Hearing;

8. Joinder of Official Committee of Equity Security Holders to Washington

9. Joinder of Official Committee of Equity Security Holders to Washington
Mutual Inc.s to Clerks order dated 2/02/12 advising of possible
dismissal due to lack of jurisdiction;

10. Joinder of Official Committee of Unsecured Creditors to Washington
Mutual Inc.s Response in Opposition for Expedited Review and
3

Mutual Inc.s Response to the Clerks Order Regarding the Immediate
Appealability Under 28 U.S.C. 1292(a)(1) and Denial of a Stay of
Confirmation Hearing Proceedings;

12. Motion filed by Official Committee of Equity Security Holders to proceed
as Intervenors in Support of Appellees in No. 12-1263.

No. 12-1264

In re: BLACK HORSE CAPITAL, LP et al,
Petitioners
(D. Del. No. 1-11-cv-00124)

1. Petition by Petitioners for Writ of Mandamus;

2. Appendix by Petitioners In Support of Petition for Writ of Mandamus;

3. Motion by Petitioners for Expedited Review and to Stay the Bankruptcy
Plan Confirmation Hearing;

4. Response by Respondent Washington Mutual, Inc in Opposition to Motion

5. Joinder filed by Respondent JP Morgan Chase Bank N.A. to Washington

6. Joinder by Official Committee of Equity Security Holders to
Response by Washington Mutual, Inc. in Opposition to Motion

Mutual Inc.s Response in Opposition for Expedited Review and

8. Motion filed by Official Committee of Equity Security Holders to proceed
as Intervenors in Support of Respondents in No. 12-1264.

4

Present: SCIRICA, SMITH and CHAGARES, Circuit Judges

______________________________ORDER________________________________
The foregoing appeal, No. 12-1263, is dismissed for lack of jurisdiction. The District
Court did not certify an appeal, and the order is not appealable as a final order. See 28
U.S.C. 158(d). The District Courts decision to decline to stay a hearing scheduled to
take place in Bankruptcy Court on February 16, 2012, does not amount[] to an effective
dismissal of the underlying suit, CTF Hotel Holdings, Inc. v. Marriott Intl, Inc., 381
F.3d 131, 135 (3d Cir. 2004), or qualify as a collateral order under Cohen v. Beneficial
Industrial Loan Corp., 337 U.S. 541 (1949), or deny a procedurally proper independent
mandamus action, see Fed. R. App. P. 21; see also Detroit & Mackinac Ry. Co. v. Mich.
R.R. Commn, 240 U.S. 564, 571 (1916). In addition, the District Courts order is not
immediately appealable under 28 U.S.C. 1292(a)(1). The decision was not designed
to accord or protect some or all of the substantive relief sought by a complaint in more
than a [temporary] fashion. In re Pressman-Gutman Co., Inc., 459 F.3d 383, 392 (3d
Cir. 2006); see also In re Trans World Airlines, 18 F.3d 208 (3d Cir. 1994) (grant of stay
pending appeal in bankruptcy proceeding does not constitute an injunction under 1292).
Because the Court lacks jurisdiction over the appeal, the pending motions are dismissed
as moot.

In the alternative, even assuming jurisdiction exists, we would conclude the Bankruptcy
Court and the District Court did not err in denying the stay at this stage in the
proceedings. To determine whether to grant a stay pending appeal, a court must consider:
(1) whether the stay applicant has made a strong showing that he is likely to succeed on
the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether
issuance of the stay will substantially injure the other parties interested in the proceeding;
and (4) where the public interest lies. Republic of Philippines v. Westinghouse Elec.
Corp., 949 F.2d 653, 658 (3d Cir. 1991). These factors do not warrant a stay pending
appeal in this instance. Nor have Petitioners offered to post a supersedeas bond.
1

Petitioners also seek a writ of mandamus which appellate courts issue only in
exceptional cases where the traditional bases for jurisdiction do not apply. United

1
Fed. R. Bankr. P. 8005 grants the bankruptcy judge discretion to stay or continue
proceedings pending appeal. Collier states, Once a bankruptcy court order, judgment or
decree has been entered . . . the prevailing party is free to execute upon or otherwise seek
to enforce it. However, the losing party is permitted to seek a stay of the judgment to
maintain the status quo pending appeal. 10 Collier on Bankruptcy 8005.1 (16th ed.
2011). Collier also notes that Rule 8005 permits a bankruptcy court to go forward with
respect to hearings on a plan pending [an] appeal of disputed ownership of estate assets.
Id. 8005.13.
5

States v. Higdon, 638 F.3d 233, 245 (3d Cir. 2011). This drastic, very rare, and
discretionary remedy is proper only when (1) the petitioner has no other adequate
means to obtain the desired relief and (2) the petitioner has met its burden of showing that
its right to the writ is clear and indisputable. Id. (citing Cheney v. U.S. Dist. Ct. D.C., 542
U.S. 367, 380-81 (2004)). Because petitioners right to the writ here is not clear and
indisputable, we decline to issue a writ of mandamus. Petitioners Motion for Expedited
Review and To Stay the Bankruptcy Plan Confirmation Hearing and their Petition for
Writ of Mandamus in No. 12-1264 are accordingly denied.
2

By the Court,

/s/ Anthony J. Scirica
Circuit Judge

DATED: February 10, 2012

cc:
Julie Ann Finocchiaro, Esq.
Adam G. Landis, Esq.
Travis A. Mc Roberts, Esq.
Matthew B. McGuire, Esq.
John H. Schanne, II, Esq.
David B. Stratton, Esq.
Joseph J. Langkamer, Esq.
Timothy K. Lewis, Esq.
Robert J. Stark, Esq.
Nancy Winkelman, Esq.
Richard A. Barkasy, Esq.
Bernard G. Conaway, Esq.
Kathleen C. Davis, Esq.
Marla R. Eskin, Esq.
Mark T. Huford, Esq.
L. Rachel Lerman, Esq.
Gregory A. taylor, Esq.
William O. Bowden, Esq.
Stacy L. Newman, Esq.
Brian D. Glueckstein, Esq.

2
Official Committee of Equity Security Holders Motion to Proceed as Intervenors in
Support of Respondents is dismissed as moot.
A True Copy
Marcia M. Waldron, Clerk
Certified order issued in lieu of mandate.

6

Appeal Nos. 12-1263 and 12-1264
In re: Washington Mutual, et al.
In re: Black Horse Capital, et al
Page 2

Adam P. Strochak, Esq.
Miles Jarrad Wright, Esq.
Mark D. Collins, Esq.
Marcos A. Ramos, Esq.
Travis A. McRoberts, Esq.


MARCIA M. WALDRON
CLERK

OFFICE OF THE CLERK

UNITED STATES COURT OF APPEALS
21400 UNITED STATES COURTHOUSE
601 MARKET STREET

PHILADELPHIA, PA 19106-1790

Website: www.ca3.uscourts.gov

February 10, 2012

TELEPHONE

215-597-2995

Peter T Dalleo
United States District Court for the District of DelawareLockbox 18
J. Caleb Boggs Federal Building844 North King Street
Wilmington, DE 19801

RE: In Re: Black Horse Capital, LP et al
Case Number: 12-1264
District Case Number: 1-11-cv-00124

Dear Clerk:
Enclosed please find copies of the following filed today in the above-entitled case:
1. Opinion
2. Certified copy of the Judgment denying the issuance of a writ of mandamus/prohibition.
Please acknowledge receipt of the enclosed copy of this form.
Very truly yours,


By: Maria, Case Manager
267-299-4937

cc:
William P. Bowden, Esq.
Julie A. Finocchiaro, Esq.
Mark T. Hurford, Esq.
Michael J. Merchant, Esq.
John H. Schanne II, Esq.
Honorable Gregory M. Sleet
Gregory A. Taylor, Esq.
Miles J. Wright, Esq.


MARCIA M. WALDRON
CLERK

OFFICE OF THE CLERK

UNITED STATES COURT OF APPEALS
21400 UNITED STATES COURTHOUSE
601 MARKET STREET

PHILADELPHIA, PA 19106-1790

Website: www.ca3.uscourts.gov

February 10, 2012

TELEPHONE

215-597-2995

William P. Bowden, Esq.
Ashby & Geddes
500 Delaware Avenue
P.O. Box 1150, 8th Floor
Richards, Layton & Finger
One Rodney Square
920 North King Street
Campbell & Levine
Suite 300
Wilmington, DE 19801-0000
Campbell & Levine
Suite 300
Campbell & Levine
Suite 300
Julie A. Finocchiaro, Esq.
One Rodney Square
Sullivan & Cromwell
125 Broad Street
New York, NY 10004-0000
Mark T. Hurford, Esq.
Campbell & Levine
Suite 300
Landis, Rath & Cobb
919 Market Street
Suite 1800, P.O. Box 2087
Schnader Harrison Segal & Lewis
1600 Market Street
Suite 3600
Philadelphia, PA 19103
Akin, Gump, Strauss, Hauer & Feld
2029 Century Park East
Suite 2400
Los Angeles, CA 90067-0000
1600 Market Street
Suite 3600
One Rodney Square
Landis, Rath & Cobb
919 Market Street
Michael J. Merchant, Esq.
One Rodney Square
Ashby & Geddes
500 Delaware Avenue
One Rodney Square
John H. Schanne II, Esq.
Pepper Hamilton
1313 Market Street
Brown Rudnick
7 Times Square
47th Floor
New York, NY 10036-0000
Pepper Hamilton
1313 Market Street
Weil, Gotshal & Manges
1300 I Street, N.W.
Suite 900
Washington, DC 20005-0000
Gregory A. Taylor, Esq.
Ashby & Geddes
500 Delaware Avenue
1600 Market Street
Suite 3600
Miles J. Wright, Esq.
Weil, Gotshal & Manges
1300 I Street, N.W.
Suite 900
Washington, DC 20005-0000
RE: In Re: Washington Mutual, et al, et al
Case Number: 12-1263
District Case Number: 1-11-cv-00124

ENTRY OF JUDGMENT
Today, February 10, 2012 the Court issued a case dispositive order in the above-captioned
matter which serves as this Court's judgment. Fed. R. App. P. 36.
If you wish to seek review of the Court's decision, you may file a petition for rehearing. The
procedures for filing a petition for rehearing are set forth in Fed. R. App. P. 35 and 40, 3rd Cir.
LAR 35 and 40, and summarized below.
Time for Filing:
14 days after entry of judgment
45 days after entry of judgment in a civil case if the United States is a party
Page Limits:
15 pages
Attachments:
A copy of the panel's dispositive order only. No other attachments are permitted without first
obtaining leave from the Court.
Unless the petition specifies that the petition seeks only panel rehearing, the petition will be
construed as requesting both panel and en banc rehearing. If separate petitions for panel
rehearing and rehearing en banc are submitted, they will be treated as a single document and will
be subject to a combined 15 page limit. If only panel rehearing is sought, the Court's rules do not
provide for the subsequent filing of a petition for rehearing en banc in the event that the petition
seeking only panel rehearing is denied.

Please consult the Rules of the Supreme Court of the United States regarding the timing and
requirements for filing a petition for writ of certiorari.
Very truly yours,


By: Maria, Case Manager
267-299-4937

cc: Mr.Peter T Dalleo


US_ACTIVE:\43915718\07\79831.0003
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EXHIBIT B
Omnibus Response Chart

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TABLE OF CONTENTS
Page
Objections
1. Objection of the TPS Consortium................................................................................. 1
2. Objection of the TPS Group ......................................................................................... 5
3. Objection of the ANICO Plaintiffs ............................................................................... 5
4. Objection of the Oregon Department of Revenue ........................................................ 7
5. Objection of MBS Plaintiffs, Filed by Boilermakers National Annuity Trust,
Doral Bank Puerto Rico, Policemens Annuity and Benefit Fund of the
City of Chicago...................................................................................................... 9
6. Objection of Stephen J. Rotella, Casey, et al. ............................................................. 12
7. Objections of Pro Se Parties ....................................................................................... 13

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1. Objection of the TPS Consortium

[D.I. 9594]
Objection Response
The TPS Consortium objects that:

(a) the non-consensual third party release provisions of the Plan
violate sections 524(e) and 1123(a)(4) of the Bankruptcy Code;

(b) to the extent that Class 19 rejects the Plan and Classes 21 and 22
receive value, the Plan will violate the cram down requirements of
section 1129(b)(2)(C) of the Bankruptcy Code;

(c) compensating only some members of Class 19 for releases would
violate the requirement that members of the same class receive the
same treatment pursuant to section 1123(a)(4) of the Bankruptcy
Code;

(d) the post-Effective Date governance of the Reorganized Debtors
by nominees of the Creditors Committee, AAOC and the Equity
Committee would violate section 1123(a)(7) of the Bankruptcy Code,
because holders of preferred equity interests should have selected the
management of the Reorganized Debtors;

(e) the Debtors assumption and performance under contracts to issue
securities in connection with effectuation of the Conditional
Exchange (as defined in the Disclosure Statement) transaction would
violate section 365(c)(2) of the Bankruptcy Code;

(f) the Divestiture Rule prohibits confirmation of the Plan so long as
it contains provisions intended to affect or impair the District Courts
jurisdiction over the TPS Litigation appeal;

(g) Consistent with the Supreme Courts decision in Stern v.
Marshall, the Bankruptcy Court has constitutional authority to enter
(a) See supra 19-20.

(b) See supra 26-29.

(c) See supra 25.

(d) See supra 30-33.

(e) The Plan does not violate the restriction in section 365(c)(2) of the
Bankruptcy Code on assumption and assignment of executory contracts to
issue securities. The Debtors Schedule of Executory Contracts and
Unexpired Leases to Be Assumed or Assumed and Assigned, annexed as
Exhibit D to the Plan Supplement, provides for the protective assumption
and assignment of any contracts that may be necessary to effectuate the
transfer of the Trust Preferred Securities to JPMC, identifying:

Any and all contracts, as and to the extent necessary or required
to transfer to JPMC or its designee any and all right, title and
interest the WMI Entities may have or may ever have had in the
Trust Preferred Securities free and clear of all claims, liens,
interests and encumbrances, as contemplated in Section 2.3 of the
Global Settlement Agreement, as and to the extent such contracts
are or may be executory contracts, including, without limitation,
(a) offering circulars, (b) trust agreements, (c) exchange
agreements, (d) side letters, and/or (e) any additional ancillary and
subsidiary documents; provided however, that the forgoing is
without prejudice to the rights of the Debtors and JPMC with
respect to the Trust Preferred Securities and all related contracts in
the event the Global Settlement Agreement is not approved and/or
terminates.

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[D.I. 9594]
only proposed findings of fact and conclusions of law in connection
with the approval of the Global Settlement Agreement;

(h) the Plans payment of post-petition interest should be modified to
be calculated at the federal judgment rate in effect on the date of
confirmation, rather than the rate in effect on the petition date; and

(i) the Debtors have failed to provide evidence to support approval of
the Global Settlement Agreement.
Plan Supplement, Ex. D at 7 (emphasis added). Assumption and
assignment of these agreements is effective only as and to the extent the
agreements are executory. The Bankruptcy Court previously has
concluded that the Conditional Exchange of the Trust Preferred Securities
automatically became effective at 8:00 a.m. New York time on September
26, 2008. Accordingly, as of that date and time, any holder of Trust
Preferred Securities was deemed to be a holder of Depositary Shares tied
to WMI preferred shares and the only remaining obligations under the
governing documents were ministerial in nature. See TPS Summary
Judgment Opinion at 3-4, 9, 11-13; January Opinion at 30. The
agreements are therefore non-executory. See In re Fed.-Mogul Global
Inc., 385 B.R. 560, 575 (Bankr. D. Del. 2008) (citing Sharon Steel Corp. v.
Natl Fuel Gas Distrib. Corp., 872 F.2d 36, 29 (3d Cir. 1989) (stating that
an executory contract is a contract under which the obligation of both the
bankrupt and the other party to the contract are so far unperformed that the
failure of either to complete performance would constitute a material
breach excusing performance of the other)). Section 365(c)(2) provides
that the Trustee may not assume or assign any executory contract if
such contract is a contract to . . . issue a security of the debtor[.]
(emphasis added)). Because the agreements at issue are not executory
contracts to issue securities, section 365(c)(2) of the Bankruptcy Code is
not implicated and it poses no obstacle to the remaining administrative and
ministerial steps the Debtors contemplate in the Plan, which do not disturb
the status quo of the estate, do not effectuate the issuance of any new
securities, and do not require the members of the TPS Consortium, or
anyone else, to extend financing to the estates in connection with the Trust
Preferred Securities. See In re Teligent, Inc., 268 B.R. 723, 737 (Bankr.
S.D.N.Y. 2001) (examining the legislative history of section 365(c) and
concluding that section 365(c)(2) was intended to address only those
contracts that would force the lender to extend new cash or new credit
through the assumption of a prepetition financial agreement); Chase
Manhattan Bank v. Iridium Africa Corp., No. 00-564, 2004 WL 323178, at
*4 (D. Del. Feb. 13, 2004) (holding agreement requiring LLC members to

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[D.I. 9594]
purchase additional LLC interests from the debtor upon an event of default
was not subject to section 365(c)(2) because the purchase commitment was
analogous to an old equity investment that the Members already made
(citation omitted)).

(f) As explained in the Objection of Debtors to the Motion of the
Consortium of Trust Preferred Security Holders For A Stay of
Confirmation Proceedings Pending Appeal, dated January 4, 2012
[D.I. 9314], incorporated by reference herein, the TPS Consortiums
meritless argument fails for the same reasons that it previously failed. As
the Bankruptcy Court ruled in the September Opinion, it is not divested of
jurisdiction to enforce its previous orders. See September Opinion at 20
(The TPS Consortiums argument that the Divestiture Rule provides that
an appeal divests the bankruptcy court of all jurisdiction over the
matter is too broad.). Black Horse Capital LP v. JPMorgan Chase Bank
NA, Inc. (In re Washington Mutual, Inc.), No. 11-124 (GMS) (D. Del. Jan.
19, 2012) (agreeing with the Bankruptcy Court that the bankruptcy court
has jurisdiction to consider confirmation of the plan, including the transfer
of the TPS, notwithstanding the pendency of an appeal from its order
determining who owns them); see also Black Horse Capital Master Fund
Ltd. v. JPMorgan Chase Bank, N.A. (In re Washington Mutual Inc.), No.
12-1263 (3d Cir. Feb. 10, 2012).

(g) The Bankruptcy Court already has ruled that, notwithstanding Stern v.
Marshall, the Bankruptcy Court does have jurisdiction over the claims the
estate has against JPMC and the FDIC, and the settlement of such claims.
See September Opinion at 9 (concluding that the Stern v. Marshall
decision does not support the TPS Consortiums contention that the Court
lacks jurisdiction over the [Global Settlement Agreement] or confirmation
of the Modified Plan). Black Horse Capital LP v. JPMorgan Chase Bank
NA, Inc. (In re Washington Mutual, Inc.), No. 11-124 (GMS) (D. Del. Jan.
19, 2012); see also Black Horse Capital Master Fund Ltd. v. JPMorgan
Chase Bank, N.A. (In re Washington Mutual Inc.), No. 12-1263 (3d Cir.

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[D.I. 9594]
Feb. 10, 2012).

(h) Regarding the calculation of the federal judgment rate, the Bankruptcy
Court unequivocally determined that section 726(a)(5) of the Bankruptcy
Code expressly provides that such interest shall be paid at the legal rate
from the date of the filing of the petition suggesting that it is the interest
rate effective on the petition date that should be used. September
Opinion at 88 (citing 11 U.S.C. 726(a)(5)). The Bankruptcy Court
further concluded that [t]he case law is uniform in holding that it is the
petition date at which the federal judgment rate is determined for purposes
of awarding interest under section 726(a)(5). September Opinion at 88
(citations omitted). Accordingly, the reasserted objection of the TPS
Consortium should be denied.

(i) As more fully set forth in the January Opinion and the September
Opinion, the compromise and settlement embodied in the Global
Settlement Agreement and the transactions contemplated therein, are fair,
reasonable, and in the best interests of the Debtors, the Debtors creditors,
and the Debtors chapter 11 estates. The Bankruptcy Court has twice
determined that the Global Settlement Agreement is fair and reasonable,
and that the Sixth Amended Plan and the Modified Plan were proposed in
good faith. See September Opinion at 31-32; January Opinion at 2, 64; see
also Confirmation Memorandum at 36-40, 58-59. Based upon the
Bankruptcy Courts statements at the hearing to approve the disclosure
statement for the Modified Plan and the January 20, 2011 status
conference, this determination constitutes the law of the case and is not
subject to relitigation or reconsideration. See September Opinion at 27.

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2. Objection of the TPS Group

[D.I. 9593]
Objection Response
The TPS Group objects that:

(a) the global understanding in the Plan among the Debtors, the
Equity Committee, AAOC and others, is unreasonable;

(b) the Plan improperly releases the Debtors claims against AAOC;
and

(c) the requested vacatur in the Plan is not allowable.
(a) See supra 34-36.

(b) See supra 37-39.

(c) See supra 40-49.

3. Objection of the ANICO Plaintiffs
[D.I. 9583]
Objection Response
American National Insurance Company, American National Property
and Casualty Company, Farm Family Life Insurance Company, Farm
Family Casualty Insurance Company, and National Western Life
Insurance Company (collectively, the ANICO Plaintiffs) object
that the Plan and the Global Settlement Agreements Stipulation and
Order of Dismissal With Prejudice with respect to the ANICO
Litigation may release or bar claims that the FDIC Receiver does not
own.
The Debtors treatment of the ANICO Plaintiffs claims is consistent with
the Bankruptcy Courts ruling in the January Opinion. Specifically, the
Bankruptcy Court ruled that the Plan must provide that there is no release
being provided under the Plan or the Global Settlement by the ANICO
Plaintiffs of their direct claims against any party (other than the Debtors)
and that the Court is making no determination as to who owns the claims
in the ANICO Litigation. January Opinion at 80. In response, the
Modified Plan, and now the Plan, provide that:

Nothing contained herein or in the Confirmation Order
with respect to the releases, exculpations, injunctions or
similar provisions is intended to, nor shall it, release,
enjoin or restrain the prosecution of direct claims, if any,
asserted, or that could have been asserted, in the Texas
Litigation against any non-Debtor Entity; provided,
however, that the foregoing is without prejudice to the

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3. Objection of the ANICO Plaintiffs
[D.I. 9583]
rights of any such non-Debtor Entity to contest, upon
notice and a hearing, the validity, merits and ownership
of or standing to assert any such direct claims; and,
provided, further, that the Bankruptcy Court is not
making, either pursuant to the Plan or the Confirmation
Order, a determination as to which Entity, including,
without limitation, the Debtors, owns the claims
asserted, or that could have been asserted, in the Texas
Litigation . . . .

See Plan 41.6(g). Further, the Bankruptcy Court ruled that any
stipulation of dismissal that the Debtors file in the ANICO Litigation must
expressly state that they are dismissing only claims which they own.
January Opinion at 80-81. In response, the Stipulation and Order of
Dismissal With Prejudice in the Global Settlement Agreement was
amended to explicitly note that WMI, JPMC, and the FDIC agree that all
claims, causes of action, and objections of any sort asserted in the [ANICO
Litigation] which are derivative in nature of WMI and Washington Mutual
Bank shall be and hereby are dismissed with prejudice to refiling the same
or any part thereof. See Global Settlement Agreement, Ex. K (emphasis
added).

To the extent that the ANICO Plaintiffs request additional language that
narrows the releases embodied in the Plan, the Debtors submit that this is
inappropriate and inconsistent with the Plan. Accordingly, the Plan and
Global Settlement Agreement are consistent with the Bankruptcy Courts
January Opinion, and the ANICO Plaintiffs Objection should be
overruled.

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4. Objection of the Oregon Department of Revenue

[D.I. 9557]
Objection Response
The Department of Revenue for the State of Oregon (the Oregon
DOR) objects that:

(a) the Plan does not (expressly) provide for post-confirmation
interest on the Oregon DORs asserted Claims; and

(b) the proposed non-Debtor releases set forth in the Plan are too
broad and should expressly carve-out the Oregon DORs Claims,
including any setoff claims.
The Debtors have incorporated certain modifications to the proposed order
confirming the Plan, which modifications have resolved the objection
interposed by the Oregon DOR.

(a) With respect to the payment of the Priority Tax Claims, the Debtors
have agreed to revise the proposed order confirming the Plan to provide:

Each holder of an Allowed Priority Tax Claim shall
receive, in satisfaction, release, and exchange of
such holders Allowed Priority Tax Claim, payment
in full, in Cash, on or as soon as reasonably
practicable following the later to occur of (i) the
Effective Date and (ii) the date on which such claim
becomes an Allowed Claim, and to the extent that
payment is made after the Effective Date, together
with interest accrued thereon at the applicable non-
bankruptcy rate as of the calendar month in which
the Plan is confirmed.

(b) With respect to the release of the claims asserted by the Oregon DOR,
the Debtors have agreed to revise the proposed order confirming the Plan
to provide:

Limited Governmental Exceptions. Nothing
contained in the Plan or this Order shall (1)
(i) release, or is intended to release, any non-
Debtor, including any non-Debtor Entity that may
be a Released Party or a Related Person, in
connection with any legal action or claim brought
by the United States Securities and Exchange

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[D.I. 9557]
Commission or (ii) prejudice the rights of any such
non-Debtor Entity to defend or otherwise contest
any such legal action or claim, (2) (i) to the extent
that (A) the Pension Plans are terminated from and
after the Effective Date and (B) the Pension Plans
are underfunded as of the Effective Date, release, or
is intended to release, any non-Debtor, including
any non-Debtor Entity that may be a Released Party
or a Related Person, from any liability as a fiduciary
of the Pension Plans, under any law, government
policy or regulatory provision, (ii) enjoin or
preclude the Pension Benefit Guaranty Corporation
from enforcing such liability against such non-
Debtor Entity during the applicable statute of
limitations period set forth in 29 U.S.C. 1303
following any such termination, or (iii) prejudice
the rights of any such non-Debtor Entity to defend
or otherwise contest any such legal action or claim,
or (3) (i) release the claims held by the California
Franchise Tax Board or the Oregon Department of
Revenue (together, the State Taxing Agencies),
including rights of setoff and recoupment with
respect to claims against or among two or more
non-Debtor Entities, against any non-Debtor and,
notwithstanding any other provision of the Plan or
this Order, the State Taxing Agencies shall not be
enjoined from pursuing any such claims and
(ii) prejudice the rights of any such non-Debtor to
defend or otherwise contest any such legal action or
claim, or the rights and obligations as between

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[D.I. 9557]
JPMC and the FDIC pursuant to the P&A
Agreement with respect to any such legal action or
claim.

5. Objection of MBS Plaintiffs, Filed by Boilermakers National Annuity Trust, Doral Bank Puerto Rico, Policemens Annuity
and Benefit Fund of the City of Chicago
[D.I. 9581]
Objection Response
The Policemens Annuity and Benefit Fund of the City of Chicago
(Policemens Fund), Boilermakers National Annuity Trust
(Boilermakers), and Doral Bank Puerto Rico (Doral and
collectively with Policemans Fund and Boilermakers, the MBS
Plaintiffs), on behalf of themselves and the class (the MBS Class)
of all persons who purchased or otherwise acquired interest in certain
Washington Mutual Pass-Through Trusts, object that:

(a) the Plan fails to establish a reserve in Class 12 for the proof of
claim recently filed by the MBS Plaintiffs on behalf of the MBS
Class (the Class Claim);
(b) the Plan violates section 1129(a) of the Bankruptcy Code by
failing to comply with applicable provisions of chapter 11 of the
Bankruptcy Code such as section 1122(a), including by failing to
take a position on whether the Class Claim belongs in Class 12 or
Class 18;
(c) to the extent that the Bankruptcy Court determines that the Class
Claim belongs in Class 18, the Plan violates the absolute priority rule
by providing for a distribution to Classes junior to Class 18;
(a) The Debtors have established a reserve in Class 12 for the Class Claim.
Therefore, this objection of the MBS Plaintiffs is moot.
(b) There is no violation of either section 1122(a) or section 1129(a) of the
Bankruptcy Code. The MBS Plaintiffs allege that, by placing the Class
Claim into Class 12 for voting purposes, the Debtors have violated
section 1122(a), which states that a plan may place a claim or interest in a
particular class only if such claim or interest is substantially similar to the
other claims or interests in that class, if the Class Claim is later found by
the Bankruptcy Court to belong in Class 18.
First, in a separate motion, the MBS Plaintiffs themselves requested that
the Class Claim be a Class 12 Claim for voting purposes. The Debtors
consented. At a hearing to consider this uncontested request, the MBS
Plaintiffs sought to have their alleged claim allowed on the merits. In
response, the Bankruptcy Court limited the relief to that which had been
requested. At that time, the Bankruptcy Court acknowledged that, in
accordance with the Disclosure Statement Order, all rights to dispute all
aspects of the asserted claim have been preserved. There is no violation of
section 1122(a) of the Bankruptcy Code because, unless and until the
Debtors decide to seek to either disallow or subordinate the Class Claim,
the Class Claim is properly placed exactly where the MBS Plaintiffs

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[D.I. 9581]
(d) the Plan should not impact the rights of the MBS Plaintiffs and
the MBS Class to proceed with their claims against the Debtors to
the extent of available insurance coverage, irrespective of any
injunction, discharge or distribution under the Plan; and
(e) the Plan does not provide any basis for the extension of stays or
injunctions beyond the Confirmation Date, and such extension is
inappropriate and prejudicial to MBS Plaintiffs and the MBS Class.
sought to place itin Class 12. Until the time that the Court decides to act
on any such request to subordinate or disallow the Class Claim, the Class
Claim is not any different than any other general unsecured claim, all of
which have been placed in Class 12. By seeking a formal determination at
this time as to whether the Class Claim should be properly placed in Class
12 or Class 18 for distribution purposes, the MBS Plaintiffs are seeking to
short circuit the claims reconciliation process that the Debtors have been
pursuing for nearly 3 years, since the Bar Date, which is in full accord with
the Bankruptcy Rules and the Delaware Local Rules.
With respect to the claims resolution process, there are still claims that the
Debtors have not had the time and manpower to review to conclusion and
to decide whether to object to or not. In fact, the Debtors are still filing
omnibus objections to claims that were filed nearly three (3) years ago,
and pursuant to the Plan, the Liquidating Trustee is entitled to object to
Claims up to six (6) months after the Effective Date. The MBS Plaintiffs
filed the Class Claim less than one month ago. As the Bankruptcy Court
itself noted recently, there is no reason that the Bankruptcy Court needs to
make a determination at this time as to the class of the Class Claim for
distribution purposes, because to do so would provide the MBS Plaintiffs
with a sort of relief that no other claimant in these chapter 11 cases has
been given.
(c) There is no violation of the Absolute Priority Rule simply by virtue
of a distribution to classes junior to Class 18. See 11 U.S.C. 1129(b).
Specifically, the Absolute Priority Rule requires that a class of claimants
that votes to reject a plan be paid in full before any member of a
subordinate class is paid, in order to insure that members of dissenting
classes are fairly and equitably treated. By its own definition, the Absolute
Priority Rule cannot be invoked with respect to Class 18, because
solicitation has been completed and Class 18 has accepted the Seventh
Amended Plan.

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[D.I. 9581]
(d) There is no basis to grant the MBS Plaintiffs request to limit the
discharge of the Debtors provided in the Plan so that the MBS Plaintiffs,
on behalf of the MBS Class, may pursue their claims against the Debtors,
to the extent of available insurance proceeds. Section 1141(d) of the
Bankruptcy Code expressly authorizes the discharge of prepetition claims
against a debtor. See 11 U.S.C. 1141(d) (stating that confirmation of a
plan, subject to certain restrictions, discharges the debtor from any debt
that arose before the date of such confirmation . . .). In accordance with
section 1141(d) of the Bankruptcy Code, Section 41.2(a) of the Plan
provides that, upon the Effective Date, the Debtors shall be deemed
discharged and released from, among other things, any and all Claims,
suits, and causes of action of any nature whatsoever, including, without
limitation, liabilities that arose before the Effective Date. See Plan 41.2.
Furthermore, the MBS Plaintiffs claim that the discharge provisions of the
Bankruptcy Code and the Plan are inapplicable because WMI is allegedly
liquidating ignores the unambiguous provisions of the Plan, which
provide, among other things, that the Reorganized Debtors will continue to
operate as a going concern. Because the Plan is consistent with the
provisions of the Bankruptcy Code, the MBS Plaintiffs request for an
exception to the Plans discharge and injunction provisions should be
denied.
(e) The Debtors believe that the extension of stays and injunctions
provided in Section 41.13 of the Plan is necessary and appropriate to
protect the Liquidating Trustee from parties seeking to assert claims and
causes of action against the Liquidating Trust, and will enable the
Liquidating Trustee to effectively manage and administer the Liquidating
Trust Assets and distribute the proceeds thereof to creditors. Moreover,
the extension of injunctions to the closing of the case is typical in large,
complex chapter 11 cases involving liquidating trusts. See, e.g., In re
Motors Liquidation Co., No. 09-50026 (REG) (Bankr. S.D.N.Y. Mar. 29,
2011) [D.I. 9941] (confirming chapter 11 plan containing a similar
provision); In re Enron Corp., No. 01-16034 (AJG) (Bankr. S.D.N.Y.

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[D.I. 9581]
July 15, 2004) [D.I. 19759] (same). To the extent necessary, the MBS
Plaintiffs or other parties may seek relief from the Bankruptcy Court from
stays and injunctions set forth in the Plan. Accordingly, the Debtors
submit that Section 41.13 of the Modified Plan will not prejudice the MBS
Plaintiffs or the MBS Class.

6. Limited Objection of Thomas Casey, David Schneider, Todd Baker, Alfred Brooks, Debra Horvath, and John Mcmurray;
Objection of Stephen J. Rotella
[D.I. 9580; 9592]
Objection Response
Thomas Casey, David Schneider, Todd Baker, Alfred Brooks, Debra
Horvath, John Mcmurray and Stephen J. Rotella (the D&O
Objectors) object:

(a) that the Debtors, pursuant to Section 34.6 of the Plan,
impermissibly seek to reject their indemnification obligations to their
directors and officers, which arise from certain prepetition
indemnification agreements between the directors and WMI, the
articles of incorporation and by-laws of WMI, Washington state law
and federal regulations, none of which constitute executory
contracts subject to rejection;

(b) to Plan, to extent that Section 34.6 or any other provision has any
effect on the insurance policies covering the Debtors
indemnification obligations to its directors and officers or the
obligations of the insurers under such insurance policies; and

(c) to the Plan, to the extent that Section 41.12 can be interpreted to
(a) The Debtors seek to reject the indemnification obligations pursuant to
the Plan only out of an abundance of caution. Whether or not the contracts
relating to the Debtors indemnification obligations are executory, the
D&O Objectors have prepetition contingent claims against the estate for
indemnification to which the Debtors objected in their Sixtieth Omnibus
Objection to Claims [D.I. 5970], a hearing on which is scheduled for
February 24, 2012 in the Bankruptcy Court.

(b) The Debtors believe that the rejection of the indemnification
obligations will have no effect upon the obligations of the various insurers
under the related insurance policies.

(c) The Debtors intend to amend the Confirmation Order to expressly
preserve any setoff and recoupment rights that the D&O Objectors may
have under applicable non-bankruptcy law.

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6. Limited Objection of Thomas Casey, David Schneider, Todd Baker, Alfred Brooks, Debra Horvath, and John Mcmurray;
Objection of Stephen J. Rotella
[D.I. 9580; 9592]
extinguish the setoff and recoupment rights of the D&O Objectors.

7. Objections of Pro Se Parties
(The list of docket numbers is attached hereto as Exhibit 1)
Objection Response
Certain pro se parties object that:
(a) the Junior Subordinated Notes Indenture does not define the term
interest and does not properly alert junior creditors to the various
risks arising from the payment of interest at a rate other than the
contract rate;
(b) the intent of the Junior Subordinated Notes Indenture was to
protect senior creditors from not receiving interest at all and not to
protect them from not receiving the difference between the contract
rate and the federal judgment rate;
(c)(1) the Debtors are obligated to pay PIERS [Claims] at the
contract rate, and the Debtors should place in escrow the amount
required for PIERS Claims to receive payment in full during the
pendency of appeals; and it is the responsibility of the Bankruptcy
Court to ensure that only those holders of PIERS Claims that vote to
accept the Plan should have to pay over interest to senior creditors at
the contract rate; (2) the Plan should provide for a reserve so as to
avoid equitably mooting the appeals brought by both the PIERS
Trustee and Normandy Hill. The reserve should preserve 86% of
the PIERS potential recovery until an appeal can be heard;
(d) holders of PIERS Claims are entitled to receive payment in full of
(a) The adequacy of the disclosure of any risks regarding the terms of the
Junior Subordinated Notes Indenture has no bearing on confirmation of the
Plan.
(b) The Bankruptcy Court has determined that the Debtors are required to
pay postpetition interest on unsecured claims at the federal judgment rate.
See September Opinion at 77-78 (ruling that the federal judgment rate is
the appropriate rate to be applied under section 726(a)(5), rather than the
contract rate). Moreover, the Bankruptcy Court found that Plan
provisions that give effect to the subordination provisions in the indentures
and require subordinated creditors to pay senior creditors postpetition
interest at the contract rate even though the Debtors are only required to
pay interest at the federal judgment rate are not violative of the Bankruptcy
Code. September Opinion at 97-98. Based upon these determinations,
there is no basis for the relief requested.
(c)(1) This allegation pertains to a dispute between creditors relating to
certain inter-creditor agreements and is not an objection to confirmation of
the Plan.
(c)(2) This Objection is moot as the District Court has remanded the
appeal to the Bankruptcy Court. Additionally, the PIERS Trustee and
Normandy Hill have agreed to withdraw their respective appeals upon

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principal and interest before holders of Equity Interests receive any
payments or distributions;
(e)(1) holders of PIERS Claimsother than AAOCare unfairly
paying for the actions of other parties, and the Bankruptcy Court
should subordinate all senior Claims held by AAOC below the
PIERS Claims held by all other holders of PIERS Claims; (2) the
Plan is unfair to holders of PIERS Claims because estate assets were
improperly used to settle the disputes in Mediation, such that the
estimated recovery to the holders of PIERS Claims has decreased
since October 31, 2011, while the estimated recovery to the holders
of Claims in Classes 2 and 3 has increased;
(f)(1) the Global Settlement Agreement provides incomplete
information regarding the disposition of certain assets; (2) JPMC and
the FDIC engaged in misconduct in connection with the seizure and
sale of WMB, and should contribute their entire stake they want to
have in the tax refunds (emphasis omitted); (3) JPMC is hiding
tens of billions in benefits they have received from the Washington
Mutual transaction in plain sight; (4) the FDIC Receiver failed to
maximize the value of the WMB estate; (5) WMI is holding a
secured claim against the FDIC Receiver; (6) FDIC Corporate is
potentially liable for constructive fraudulent transfer actions;
(7) FDIC Corporate is responsible for WMBs loss of value with
respect to the Purchase and Assumption Agreement; (8) the
numerous delays in this casecaused at least in part by JPMCs
threat to investigate note holders for potential insider tradinghas
rendered the Global Settlement Agreement materially and
unacceptably worse for the Debtors; (9) the Global Settlement
Agreement is no longer fair and reasonable because the immediate
cash benefits of the global settlement no longer exist; (10) there is no
adequate explanation of why JPMCs offer for the Visa Shares was
confirmation of the Plan.
(d) Pursuant to section 1129(a)(8)(A) of the Bankruptcy Code, holders of
PIERS Claims may agree to receive less than payment in full from the
Debtors. There is no violation of the Absolute Priority Rule simply by
virtue of a distribution to classes junior to Class 16. The Absolute Priority
Rule requires that a class of claimants that votes to reject a plan be paid in
full before any member of a subordinate class is paid, in order to insure
that members of dissenting classes are fairly and equitably treated.
Because Class 16 has voted overwhelmingly (84% in number and 99% in
amount) to accept the Plan, the distribution of value to holders of Claims
and Equity Interests in Classes junior to Class 16 does not violate the
Absolute Priority Rule. See Sharp Decl. at 24.
(e)(1) This Objection provides no basis for the subordination of Claims
and, therefore, should be overruled.
(e)(2) See infra Response to Objections of Pro Se Parties, (o).
(f) The Disclosure Statement provides adequate information regarding the
assets of the Debtors, see, e.g., Disclosure Statement, IV.A., and the
disposition of such assets pursuant the Plan. See, e.g., id. at III.B.1. The
Bankruptcy Court already has approved the adequacy of such disclosure.
See Disclosure Statement Order at 2-3. Accordingly, no other or further
information is necessary. Id.
With regard to the reasonableness of the Global Settlement Agreement, as
set forth above, the Bankruptcy Court has found the settlement to be fair
and reasonable. See September Opinion at 31-32; January Opinion at 2,
64.
(g) As set forth in the Disclosure Statement, the Reorganized WMI
Interests (defined therein) will not be listed for trading on any national

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reduced from $50 Million in the First Disclosure Statement
(3/26/2010) to $25 Million in the First Amended Plan; (11) JPMC
should voluntarily relinquish its claims to the tax refunds in order to
obtain releases and to allow the Reorganized Debtor to pursue
litigation against potential third parties;
(g)(1) the Plan should provide that the Debtors will list the
Reorganized Common Stock on the New York Stock Exchange
within a month; (2) the Plan does not indicate when or whether the
Reorganized Common Stock will be listed on a national stock
exchange;
(h) the profits made out of Insider Trading can be encashed by a
court ordered action and be gifted on a pro rata basis, trickling
down the waterfall to the classes one down to eighteen (emphasis
omitted);
(i) the Dime Warrant Litigation should be remanded to its proper
venue, the United States Federal Court of Claims for final
determination of claim amounts and payment method,;
(j) the Bankruptcy Court should deny the Debtors motion, dated
January 11, 2012 [D.I. 9389], for approval of the Dime Warrant
Stipulation;
(k) the ballots for accepting the Dime Warrant Stipulation should be
nullified;
(l)(1) certain beneficial holders were not afforded sufficient time to
vote with respect to confirmation of the Plan, or make elections in
connection therewith; (2) the solicitation materials transmitted did
not include any direction on how or where or when to return the
ballot for voting on the plan and granting/declining the releases
securities exchange or other organized trading market as of the Effective
Date. See Disclosure Statement, IX.B.2. In the event that the directors of
Reorganized WMI believe that listing of Reorganized Common Stock is
desirable, such listing will be subject to, among other things, compliance
with applicable federal securities laws, as well as the listing requirements
set forth by the exchange on which Reorganized WMI may seek to list its
securities. See id.
(h) The Debtors are not aware of any profits made on account of any
alleged insider trading claims and such claims have been disputed by the
Debtors and AAOC. Notwithstanding such allegations, AAOC is
providing substantial consideration to the Debtors estates, which
contribution will enable the Debtors estates to provide distributions to
holders of Claims and Equity Interests. See Confirmation Memorandum
at 44.
(i),(j) The objections to approval of the Dime Warrant Stipulation, and the
related request for remand, are not objections to confirmation of the Plan,
and are procedurally improper. Additionally, the Bankruptcy Court
already has approved the Dime Warrant Stipulation, and has specifically
found that the settlement embodied in the Dime Warrant Stipulation is in
the best interest of the Debtors, their creditors, the holders of Dime
Warrants, and all other parties in interest. Order Pursuant to
Section 105(a) of the Bankruptcy Code, Bankruptcy Rules 7023 and 9019,
and Federal Rule of Civil Procedure 23(e), Approving Stipulation and
Agreement Between the Debtors and Class Representatives of the
LTW Holders, entered February 13, 2012 [D.I. 9649]. In addition, the
Bankruptcy Court expressly ruled that it possessed jurisdiction to approve
the Dime Warrant Stipulation. See Hrg Tr. 2/2/2012 65:20-66:17
(explaining the multiple bases upon which the Bankruptcy Court had
jurisdiction to approve the settlement).

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sought; (3) the solicitation materials were incomprehensible; (4) a
certain shareholders broker representatives told them that to receive
their voting documents they would have to pay fees of approximately
$150 partitioned for the US depository and for the liquidator; (5) the
voting procedures are too difficult to understand; (6) the voting
procedures do not adequately explain the tax issues regarding the
conversion of shares for non-U.S. citizens (i.e. the 30% tax holdback
made upon distribution); (7) the voting procedures and materials
were too complicated, without enough instruction and too much
material to sift through; (8) the voting procedures fail to comply with
the January Opinions requirement that the debtor obtain affirmative
consent before the Plan can grant third party releases; (9) the release
elections set forth in the Ballots for Classes 16, 19, and 22 are
ambiguous;
(m) there are a number of potential claims, which the Debtors
estates may have against third parties, including certain signatories to
the Global Settlement Agreement, which claims should be preserved;
(n)(1) the proposed releases for JPMC and the FDIC are
impermissible because there is no consideration for these releases;
(2) the releases in the Plan for the JPMC Entities extend to acts of
gross negligence or willful misconduct, and, therefore, are overly
broad;
(o)(1) vacating portions of the September Opinion, as requested by
the Debtors, would essentially be a back-door partial release to
AAOC, and the Bankruptcy Court already has held that it does not
have the power to grant non-consensual third party releases;
(2) neither AAOC nor any of its professionals should receive
payment of any fees or expenses because AAOCs total
consideration to Equity is probably only a few million dollars, and
(k) The Bankruptcy Court has approved the adequacy of the Ballots and
Elections Forms provided to holders of Claims and Equity Interests,
including the Election Forms transmitted to the holders of Dime Warrants.
See Disclosure Statement Order at 6-7. In addition, by order, entered
January 10, 2012 [Adv. Pro. No. 10-50911, D.I. 315], the Bankruptcy
Court authorized the form of notice regarding, among other things, the
hearing on the motion to approve the Dime Warrant Stipulation, and the
deadline for holders of Dime Warrants to submit their respective election
forms.

(l) The Debtors and KCC have fully complied, and continue to comply,
with the solicitation procedures set forth in the Disclosure Statement
Order. As more fully set forth in the Objection of Debtors to Emergency
Motion to Stay Confirmation and Vote Counting, Under Current Modified
Seventh Amended Plan, Filed by Farokh Lam, dated February 9, 2012
[D.I. 9628], incorporated herein by reference, the Debtors have
(i) promptly delivered Ballots and Election Forms prior to the deadline
established by the Bankruptcy Court; (ii) facilitated the timely delivery and
collection of Ballots and Election Forms in coordination with the Equity
Committee, certain voting nominees, and holders of Claims and Interests;
and (iii) provided notices and other communications to holders of Claims
and Equity Interests in order to further enable such holders to submit votes
and elections with respect to the Plan. See Sharp Decl. at 11-21.
Moreover, an overwhelming number of holders of Equity Interests and
other stakeholders already have submitted Ballots and Election Forms.
See id. at 24. Lastly, holders of Common Equity Interests in Class 22
may submit release elections until the Equity Release Election Date
February 28, 2012to be eligible to receive a distribution.

To the extent that voting nominees distributed the Solicitation Packages at
different times, beneficial holders may have received Solicitation Packages
on different dates. Such variance is, however, a direct consequence of

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their prior conduct . . . resulted in [the Bankruptcy] Court
determining that colorable insider trading claims may exist against
these entities; (3) the Plan language does not create an exception,
upon a finding of willful misconduct, fraud, or fraudulent transfers,
to the requirement that the Equity Committee cause the withdrawal
and dismissal of its Adversary Proceeding, Action to Compel, and its
appeals from the January and September Opinions; (4) it is improper
to require holders of PIER Claimsother than AAOCto grant
releases of claims against AAOC in order to receive any distribution
pursuant to the Plan;
(p) the Notice of Deadlines for Filing Proofs of Claim and a Proof of
Claim Form was not properly served;
(q) The examiner appointed by the Bankruptcy Court (the
Examiner), along with his firm and other professionals, should be
considered additional third party litigation targets because the
Examiner incorrectly determined that the FDIC-Corporate releases
were appropriate despite the fact that FDIC-Corporate was providing
no consideration;
(r) the FDIC Receiver should retain the Reorganized Debtor on a
contingency basis to manage, explore, and prosecute any remaining
causes of action WMB may have against any Government agency;
(s) shareholders should be provided irrevocable protection in the
corporate bylaws of the Reorganized Debtors to prevent their
ownership to be reduced or eliminated by AAOC;
(t) (1) the Plan does not provide sufficient evidence of the agreement
between the Debtors and JPMC relating to the sharing of Tax
Refunds; (2) JPMC and the FDIC should not be allowed to have
claims on tax returns related to WMB because WMB is owned by
certain securities holders election to hold securities through a nominee,
and is not within the control of the Debtors or KCC. See Hrg Tr.
12/3/2010 167:9-168:12 (Sharp Direct) (affirming that KCC is unable to
control or ensure that solicitation materials reach certain security holders
via their respective nominees).

(m) As another bankruptcy court in the District of Delaware has explained,
there is nothing in [section 1123(b)(3)(B)] to suggest that the plan must
specifically identify each and every claim and/or interest belonging to the
debtor that may be subject to retention and enforcement. In re USN
Commcns, Inc., 280 B.R. 573, 590-91 (Bankr. D. Del. 2002) (explaining
that it is both impractical and unnecessary for a Disclosure Statement
and/or Plan to list each and every possible defendant against which a
debtor or its representative may bring an avoidance action.).
Accordingly, the Plan, together with the Disclosure Statement, properly
disclose the potential Causes of Action that may be pursued upon
confirmation of the Plan, consistent with the requirements of the
Bankruptcy Code and applicable case law.

(n)(1),(2) The Bankruptcy Court has determined that the proposed releases
set forth in the Global Settlement Agreement, including the releases of
JMPC, are permissible. See September Opinion at 99-100; January
Opinion at 64-67. Additionally, the Bankruptcy Court determined that
JPMC made a substantial contribution to the Plan by waiving claims they
had asserted against numerous assets of the Debtors . . . and by waiving
the proof[ ] of claim they have filed, and that the release of JMPC is
necessary to the Debtors reorganization and confirmation of the Plan.
January Opinion at 65. Furthermore, the Bankruptcy Court specifically
noted that the Sixth Amended Plan (as defined in the Disclosure
Statement) released the JPMC Entities and their Related Persons for gross
negligence or willful misconduct, and did not take issue with this aspect of
the releases. See January Opinion at 78.

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WMI; (3) the division of the tax refunds pursuant to the Global
Settlement Agreement is improper because, among other things,
JPMC and the FDICs claims to the tax refunds are fraudulent, and
the division does not seem to be based upon the prepetition tax
sharing agreement but rather on the interests of AAOC;
(u) (1) shareholders did not receive enough information explaining
the ramifications of their vote when they own claims in multiple
classes;
(v) (1) the Debtors should disclose more details regarding the
valuation of their intellectual property, and there should be a
valuation hearing before confirmation; (2) the Plan does not explain
why NewCo. is valued at $200 million, in contradiction with the
Liquidation Analysis which finds $145 million;
(w) (1) there is insufficient explanation regarding the sale of the
BOLI/COLI, and the transfer of such assets pursuant to the Global
Settlement Agreement; (2) the Debtors have hidden information
about the revenue of WMMRC since 9/26/2008, such as month-by-
month revenue, interest earned, and payment received; (3) several
relevant assets have disappeared or been hidden (e.g. 2.253 Million
Visa Shares were mentioned in the initial disclosure of assets but
have disappeared in later documentation); (4) the Disclosure
Statement and the Plan do not adequately describe which non-
banking subsidiaries of WMI have been sold, when they were sold,
or how much they were sold for;
(x) the Plan does not give provide the names of the future officers,
directors, or insiders to be employed after confirmation or, for
insiders, their compensation;
(y) the Plan does not explain whether the members of the Equity

(o) The Debtors believe that the third party releases set forth in the Plan
are based upon the understanding reached during the Mediation, and are
necessary for the Debtors reorganization. See Confirmation
Memorandum at 36-37, 41, 44-45, 68-69. Moreover, the proposed AAOC
releases in Section 41.5 of the Plan meet the Master Mortgage factors
because (i) such releases are essential to the Debtors reorganization
pursuant to the Plan, (ii) the $75 million contribution is a substantial
contribution to Reorganized WMI, (iii) AAOC is providing a $125 million
credit facility to Reorganized WMI and backstopping the Runoff Notes
election, and (iv) the Equity Committee and the Creditors Committee,
along with nearly all impaired classes, overwhelmingly support the Plan.
See supra 37-38.

(p) This is not an objection to confirmation of the Plan.

(q) The Bankruptcy Court already has determined that FDIC Corporate
and FDIC Receiver have made a substantial contribution to the Plan by
waiving claims they had asserted against numerous assets of the Debtors . .
. and by waiving the proof[ ] of claim they have filed . . . . January
Opinion at 65.

(r) The Debtors are not aware of any basis for the relief requested.

(s) The current Equity Interest holders will be the majority holders of the
Reorganized Common Stock. In addition, the board of directors of the
Reorganized Debtors was selected by the Equity Committee. Therefore,
the ownership rights of the holders of Equity Interests are adequately
protected.

(t) The Bankruptcy Court has twice determined that the Global Settlement
Agreement, including the allocation of tax refunds provided therein, is fair

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Committee will benefit from lucrative jobs in the NewCo and
Liquidating Trust that would give them benefits over regular
shareholders, and whether such treatment creates a conflict of
interest or taints their settlement in support of the Plan;
(z) there is a conflict of interest in the settlement of the insider
trading claims between AAOC and the Equity Committee;
(aa)(1) there was not a clear valuation of the assets transferred to
JPMC by the FDIC (e.g. the Wind Interest); (2) JMPC violated its
agreement with WMI providing that JPMC would not purchase
WMBs assets; (3) the purchase price in relation to the auction
where JPMC bought WMB was too low, and JMPC took advantage
of insider information; the Plan would render any further
prosecution of this transgression as impossible;
(bb) neither the Disclosure Statement nor the Plan contain a detailed
list of assets owned by the NewCo. or a reconciliation of the assets
owned as of the Petition Date;
(cc) the Plan improperly releases non-debtors, the Debtors directors
and officers, and hired professionals because these individuals are
guilty of naked short selling and concealing the fact of this illegal
activity from the SEC and shareholders;
(dd)(1) the Plan fails to indicate what happened to $12 billion of
WMBs pre-seizure NOLs, and the contemplated abandonment of the
WMB shares deprived the WMI of the value of the WMB shares;
(2) the Plan does not adequately explain why the Debtor, as of
12/31/2010 had $17.7 billion in NOL carryforwards, but the Equity
Committees letter in support of the plan stated that there would only
be $6 billion;
and reasonable. See September Opinion at 31-32; January Opinion at 2,
64.

(u) The Bankruptcy Court has approved the Ballots and solicitation
procedures. See Disclosure Statement Order at 4-8. The Ballots very
clearly state that holders of Claims and Interests in multiple classes will
receive a Ballot for each voting Class in which they hold a Claim or
Interest. In accordance with the Disclosure Statement Order, the Debtors,
through their claims agent, distributed solicitation packages containing the
appropriate Ballots, election forms, and/or notices of non-voting status,
which documents were in substantially the same form as those that are
annexed to the Supplemental Disclosure Statement Order. The solicitation
packages were distributed to holders of Claims directly or, if holders of the
Debtors securities hold such Claims through a nominee, such as a broker,
then to such holders nominees. See Affidavits of Service of Solicitation
Materials [D.I. 7130, 7131] (Affidavits of Service). The Debtors have
no way of verifying the unsupported allegation that the nominees for these
Pro Se Objectors sought to charge them for sending a Ballot but, as noted
in the Affidavits of Service, all court-approved solicitation procedures
were followed. Accordingly, the Debtors submit that the solicitation
packages and procedures are adequate and this objection is without merit.
Moreover, as noted above, numerous holders of Equity Interests and other
stakeholders already have submitted Ballots and Election Forms. See
Sharp Decl. at 24.

(v)(1) The Bankruptcy Court, in the January Opinion, concluded that the
value of the intellectual property is immaterial. See January Opinion at
33-34. This conclusion is based on the fact that the marks are associated
with the largest bank failure in the countrys history and because WMI
has virtually no remaining business operations. Id. To the extent that any
party in interest disagrees with the Debtors valuation of these assets, such
party had the opportunity to submit evidence demonstrating that the

US_ACTIVE:\43915718\07\79831.0003 20
RLF1 5828686V. 1

(ee)(1) the Plan does not explain whether new shares are being given
pro rata to the 3 billion authorized shares, or only to the 1.7 billion
outstanding shares; also, the Plan should explain who, if anyone,
owns the remaining 1.3 billion authorized shares, and how their
inclusion impacts the conversion from current to new common stock;
(2) the Plan does not, with regard to the $75 million pro rata
distribution, state which minimum value the Bankruptcy Court is
able to adjust this especially 30% part for the common securities
holders, or whether, in addition, as a result of such adjustment . . .
only [a] 0%-adjustment is possible; (3) the Plan does not explain
how the pro rata distribution of the section 510(b) claims will be
calculated; (4) the Plan does not explain how the number of
participating DIMEs will be determined, if they are found to be
members of Class 22; (5) the Plan is deficient because it fails to
provide likely and worst case scenarios for the conversion rate and
potential recovery for equity holders;
(ff) the Plan does not give sufficient detail to clarify whether PIERS
Claims should be classified as debt or equity;
(gg) the Escrow Account should not be kept at Wells Fargo, N.A.
because its position on the Creditors Committee creates a conflict of
interest;
(hh) the 7% rate of interest on the credit line provided by the hedge
funds is not supported by evidence, and is dissatisfactory;
(ii) William Kosturos should not be appointed as the Liquidating
Trustee, and the Disclosure Statement does not provide any
explanation as to why Mr. Kosturos is appointed as the Liquidating
Trustee;
(jj) the federal judgment rate of interest is not what the shareholders
Debtors analysis is incorrect in connection with the hearing to consider
confirmation of the Sixth Amended Plan and Modified Plan. This issue is
not open for reconsideration.

(2) The Liquidation Analysis refers to $145 million of Value to More
Junior Stakeholders. Pursuant to the Plan, Reorganized Common Stock
will be distributed to holders of Equity Interests in accordance with the
proposed allocation set forth therein, or as otherwise determined by the
Bankruptcy Court. The $145 million figure represents (A) $210 million,
the Bankruptcy Courts valuation of Reorganized WMI pursuant to the
September Opinion, less (B) $140 million, representing the Runoff Notes
to be issued by Reorganized WMI in the aggregate original principal
amount of $140 million, plus (C) the Senior Notes Release Consideration
and Senior Subordinated Notes Release Consideration, in the aggregate
total amount of $75 million.

(w) All of these objections were previously raised in connection with
confirmation of the Sixth Amended Plan or the Modified Plan, approval of
the disclosure statements related thereto, or approval of the Disclosure
Statement. The Bankruptcy Court subsequently overruled such objections.
Nevertheless, out of an abundance of caution, the Debtors address these
objections again.

(w)(1) The Debtors submit that the disclosures concerning the BOLI/COLI
assets are adequate. See Disclosure Statement V.B.8.b. Such
disclosures also include, among other things, testimony offered in support
of the Sixth Amended Plan at the first Confirmation Hearing and the
Examiners Report. See Examiners Report at 6. Moreover, in the
January Opinion, the Bankruptcy Court found that, under the Global
Settlement Agreement, the BOLI/COLI policies will be owned by the
entity on whose records they are listed. See January Opinion at 42.
Additionally, the Bankruptcy Court has twice determined that the Global

US_ACTIVE:\43915718\07\79831.0003 21
RLF1 5828686V. 1

wanted, and despite the fact that the Bankruptcy Court already has
ruled on the appropriate rate of postpetition interest, the Bankruptcy
Court should reconsider that ruling;
(kk) there is not enough information to determine whether, in paying
Administrative Expense Claims, the fees to which a certain pro se
party objected will be paid;
(ll) the Plan does not clearly indicate whether the Releases will
remain effective in the case of a 0% or insignificant recovery;
(mm) the Plan and the Global Settlement Agreement were not
proposed in good faith; and
(nn) the Bankruptcy Court should order that all shareholders who do
not grant the releases set forth in the Plan be given the option to
receive their physical share certificates for a reasonable fee or free-
of-charge;

Settlement Agreement, including the allocation of the BOLI/COLI policies
provided therein, is fair and reasonable. See September Opinion at 31-32;
January Opinion at 2, 64.

(w)(2) The Debtors submit that they have adequately disclosed
information concerning WMMRC in accordance with the standards set
forth in the Bankruptcy Code and, thus, no additional disclosure is needed.
See Disclosure Statement IV.A.6.

(w)(3) The Debtors submit that the Disclosure Statement correctly
identifies the number of Class B Visa shares held by WMI, i.e.,
3.147 million. The Debtors previously-filed schedules of assets and
liabilities erroneously listed the number of Class B Visa shares at
5.4 million. Such number represented the number of shares of Visa U.S.A.
held by WMI prior to the initial public offering of Visa Inc. held on
March 19, 2008. Subsequent to such date, WMIs 5.4 million shares of
Visa U.S.A. were converted to 3.147 million shares of Visa Inc. See
Disclosure Statement IV.A.9.c.

(w)(4) As disclosed by the Debtors, as of the Petition Date, WMI owned
33 subsidiaries (plus the stock of WMB). See Disclosure Statement
IV.A.3. Subsequent to the Petition Date, the Debtors merged certain
subsidiaries into existing WMI subsidiaries, thus reducing the number of
WMI subsidiaries and monetizing assets for distribution to WMI. Such
events are disclosed in the Debtors Monthly Operating Reports and in the
Disclosure Statement. See, e.g., Monthly Operating Report for
Washington Mutual, Inc. for the Period December 1, 2008 through
December 31, 2008, dated February 2, 2009 [D.I. 639]; Disclosure
Statement IV.A.7.a.

(x),(y) See Plan Supplement Exs. A, E.

US_ACTIVE:\43915718\07\79831.0003 22
RLF1 5828686V. 1

(z) The Debtors are not aware of any evidence, nor has any evidence been
provided, of any conflict of interest between AAOC and the Equity
Committee.

(aa) The identity and value of the assets transferred to JPMC by the FDIC
Receiver is irrelevant for purposes of confirmation of the Modified Plan.
Moreover, because the Debtors, JPMC and the FDIC each dispute whether
certain assets were transferred to JPMC at the time of the seizure and sale
of WMB, such a valuation would be impracticable. See January Opinion at
31, 33; September Opinion at 22-23.

(bb) In accordance with the requirements of the Bankruptcy Code and the
Bankruptcy Rules, the Debtors have provided detailed summaries of their
assets, including, without limitation, in their schedules of assets and
liabilities, their monthly operating reports, and the Disclosure Statement.
The Debtors refer the objecting Shareholders to Section IV.A.5 of the
Disclosure Statement, which sets forth the assets of WMI Investment, and
submit that no further disclosure is necessary pursuant to the Bankruptcy
Code and Bankruptcy Rules.

(cc) The allegations of naked short selling are unsupported by any
evidence, and the Pro Se Objector has provided no support for its assertion
that the releases contained in the Seventh Amended Plan are improper.

(dd)(1),(2) As discussed below, the Debtors have provided adequate
disclosure regarding the NOLs, and, with respect to (dd)(1), the objection
wrongly assumes that (A) WMBs pre-seizure NOLs would be available to
Reorganized WMI, and (B) such NOLs would translate into actual value
for the company. See Disclosure Statement, Section VIII.A. (Certain
Federal Income Tax Consequences of the Seventh Amended Plan
Consequences to the Debtors). The WMI consolidated tax group (the
Tax Group) currently has NOL carryforwards of around approximately

US_ACTIVE:\43915718\07\79831.0003 23
RLF1 5828686V. 1

$17.7 billion. As explained in the Disclosure Statement, [s]ubstantially
all of such NOL carryforwards are attributable to the operations of WMB
and its former subsidiaries or to the FDIC Receivers sale of substantially
all of WMBs assets to JPMC, and thus will cease to be available to the
Reorganized Debtors as of the date WMB ceases to be a member of the
Tax Groupsuch as when the FDIC distributes all of the WMB
receivership assets to WMBs creditors, or in the event that WMI
abandons its stock interest in WMB. (Contrary to the assertion of the Pro
Se Objector, the seizure and sale of WMBs assets resulted in a loss at
WMB, not at WMI.) Thus, the extinguishment of the NOLs attributable to
WMB is only a matter of time. It is also mutually exclusive of the
estimated Stock loss of approximately $5.5 billion. WMI is only entitled
to the Stock loss because its stock in WMB is in fact worthless, and can
only claim such loss at such time as WMB ceases to be a member of the
Tax Group.
In addition, if an ownership change occurs on the Effective Date, the
continued availability of the estimated $17.7 billion NOL would be subject
in its entirety to the annual limitation imposed by section 382 of the Tax
Code, which is estimated to be, at most, approximately $6 million per year.
See Disclosure Statement, Section VIII.A.2.a.i. In contrast, as discussed in
the Disclosure Statement, if the Stock Loss is recognized prior to (but in
the same taxable year as) such ownership change, the resulting NOL
would be pro-rated between the pre- and post-change portions of the
taxable year, such that the post-change portion would not be subject to the
resulting annual limitation. Significantly, the benefit of the Stock Loss
might be rendered substantially (or entirely) unavailable if the
abandonment of the Stock Loss is delayed beyond the Effective Date, due
to proposed changes in governing regulations. Accordingly, as permitted
by the Bankruptcy Courts order authorizing the abandonment of the
WMB stock in connection with a confirmed plan, the Debtors intend to
abandon their stock interest in WMB prior to the Effective Date.

US_ACTIVE:\43915718\07\79831.0003 24
RLF1 5828686V. 1


Hence, the focus on a going-forward basis on the $5.5 billion Stock Loss
(in addition to other deductions expected to be incurred in connection with
the implementation of the Plan), rather than the approximately $17.7
billion dollars of current NOL carryforwards. Further, assuming an
ownership change occurs on the Effective Date and that the Effective Date
is February 29, 2012, the post-change (pro-rata) portion of the projected
2012 NOL (taking into account the Stock Loss and other plan-related
deductions, but after reduction for expected cancellation of debt) is
estimated at approximately $5.4 billion. See Disclosure Statement,
VIII.A.2.a.i.

(ee)(1),(2) The Debtors submit that, up to approximately 1.704 billion
shares of WMIs common stock will be converted into Reorganized
Common Stock for those Equity Interest Holders who are Releasing
Equity Interest Holders (those that grant the releases set forth in the Non-
Debtor Release Provision (Section 41.6 of the Plan)). The three (3) billion
number mentioned in the Plans definition of Common Equity Interest
only represents the number of authorized shares of common stock of WMI,
not the number of shares issued and outstanding.

(ee)(3) Section 1.175 of the Plan defines Pro Rata Share with respect to
each Class of Claims as the proportion that an Allowed Claim bears to the
sum of all Allowed Claims within such Class, and (ii) among all Classes,
the proportion that a Class of Allowed Claims bears to the sum of all
Allowed Claims, without regard to subordination . . . .

(4) As the Bankruptcy Court already determined, the Disclosure Statement
contains adequate information. Specifically, as set forth in Sections
V.B.5.d of the Disclosure Statement, pursuant to the Dime Warrants
Opinion, dated January 3, 2012, the Bankruptcy Court determined that
holders of Dime Warrants hold Common Equity Interests in, rather than

US_ACTIVE:\43915718\07\79831.0003 25
RLF1 5828686V. 1

Claims against, the Debtors estates. As of the date of this filing, however,
the Dime Warrants Opinion has not yet become a Final Order. Therefore,
as set forth more fully in Section V.B.5.d of the Disclosure Statement, the
Liquidating Trustee, as escrow agent, will hold Reorganized Common
Stock in the Disputed Equity Escrow for the benefit of each holder of a
Dime Warrant pending a Final Order in the Dime Warrant Litigation. As
set forth in that section, at such time as it is determined, pursuant to a Final
Order, that (A) the holders of the Dime Warrants hold Allowed Claims,
and such Allowed Claims are not otherwise subordinated to the level of
Common Equity Interests in accordance with section 510 of the
Bankruptcy Code, the Liquidating Trustee, as escrow agent, will distribute
to the holders of Common Equity Interests entitled to receive a distribution
in accordance with the Plan, on a pro rata basis, the shares of the
Reorganized Common Stock, together with any dividends, gains or income
attributable thereto, in the Disputed Equity Escrow and (B) the holders of
Dime Warrants hold Equity Interests or Allowed Claims, and Allowed
Claims are otherwise subordinated to the level of Common Equity
Interests in accordance with section 510 of the Bankruptcy Code, the
Liquidating Trustee will distribute to the holders of Dime Warrants the
shares of Reorganized Common Stock, together with any dividends, gains
or income attributable thereto in the Disputed Equity Escrow. Such
distributions shall be made as soon as practicable after the date that the
order or judgment of the Bankruptcy Court with respect to the Dime
Warrant Litigation becomes a Final Order, but in no event more than
ninety (90) days thereafter.

(ff) As forth in the September Opinion, the Bankruptcy Court has ruled
that the PIERS Claims are, in fact, Claims and not Equity Interests. See
September Opinion at 107.

(gg) The Pro Se Objectors fail to put forth any evidence on which the
Bankruptcy Court could conclude that the designation of Wells Fargo as

US_ACTIVE:\43915718\07\79831.0003 26
RLF1 5828686V. 1

Escrow Agent is improper and, therefore, the requested relief should be
denied. Moreover, pursuant to the terms of the escrow agreement, Wells
Fargo is liable for gross negligence or willful misconduct in performing
these duties. See Global Settlement Agreement, Ex. F, Form Escrow
Account.

(hh) The rate of interest under the Credit Facility is appropriate based upon
the circumstances of the Reorganized Debtors. Further, any party who
received a Ballot or Notice of Non-Voting Status (as defined in the
Disclosure Statement Order) has the option to volunteer to become a
creditor under the Credit Facility. As of the date hereof, the Equity
Committee has received two inquiries for review.

(ii) Pursuant to the Plan and the Liquidating Trust Agreement, the
Liquidating Trustee may be removed by a majority vote of the Trust
Advisory Board. See Plan Supplement, Ex. A (Form of Liquidating
Trust), 8.2. Additionally, the Trust Advisory Board will initially consist
of nine (9) members, four (4) members selected solely by the Equity
Committee, three (3) members selected solely by the Creditors
Committee, one (1) member selected by Tricadia Capital Management,
LLC and one (1) member selected by the Creditors Committee and
approved by Equity Committee. In addition, in accordance with the
September Opinion, the Liquidating Trust Agreement provides that, when
Creditors are paid in full, the Creditors representatives will be replaced by
representatives selected by the Equity Committees designees on the Trust
Advisory Board. See id. at 6.4(c),(d).

(jj) See supra Response to TPS Consortium Objection, (h).

(kk) Professional compensation will be resolved at the final fee hearing in
accordance with Plan and the Bankruptcy Court fee order. The Debtors
submit that the Disclosure Statement adequately discloses the payment of

US_ACTIVE:\43915718\07\79831.0003 27
RLF1 5828686V. 1

Allowed Administrative Expense Claims and professionals Claims for
compensation and reimbursement. In particular, the Disclosure Statement
and Plan provide that such Claims will be paid in full only to the extent
they are Allowed Claims and, with respect to professional compensation
and reimbursement claims, to the extent such Claims have been approved
by the Bankruptcy Court in accordance with section 328, 330 or 331 of the
Bankruptcy Code. See Disclosure Statement, III.B.6.a.(1), VI.A.1-2; Plan
3.1-3.2.

(ll) As stated above, the proposed releases set forth in the Plan are only
binding in the event that a party that grants the releases also receives a
distribution pursuant to the Plan. See supra 20.

(mm) The Bankruptcy Court has twice determined that the Global
Settlement Agreement is fair and reasonable, and that the Sixth Amended
Plan and the Modified Plan were proposed in good faith. See September
Opinion at 31-32; January Opinion at 2, 64.

(nn) The Debtors are not aware of any basis for the relief requested.

US_ACTIVE:\43915718\07\79831.0003
RLF1 5828686v. 1
Exhibit 1

Pro Se Objections

Date Filed Docket No.
12/21/2011 9233
12/27/2011 9269
1/17/12 9426
1/20/12
9458
1/26/12 9497
1/31/12 9534
1/31/12 9538
2/6/12 9569
2/6/12 9570
2/6/12 9571
2/6/12 9572
2/6/12 9575
2/6/12 9576
2/7/12 9577
2/7/12 9587
2/7/12 9588
2/7/12 9589
2/7/12 9590
2/7/12 9607
2/9/12 9621

US_ACTIVE:\43915718\07\79831.0003
RLF1 5828686v. 1
EXHIBIT C

Addendum
To: Alexander Muchnik Page 12 of 15
2012-02-03 21.03:22 (GMT)
17049195457 From: Candace Duran
IN THE UNITED STATES BANKRUPTCY COURT
.FOR THE DISTRICT OF DELAWARE
X
Chapter 11
In re
Cas.e No. 08-12229 (MFW)
WASHINGTON MUTUAL, INC., 1 ill.,
Debtors. Jointly Admjnis.tered
Addendum To Class 19 Ballot
The undersigned has completed ih<; attached Ballot pertaining to Class 19 of the Seventh
Amendecl Joint Plan of Rcorg<mization of the Debtors. As set forth more fltllyin
the Complaint initiating Adv. Pro. No. 10-51387 (Black Horse Capital LP, et .. a!. v. JPMorgan
Chase Bank, NA., fl1.. at), the undersigned disputes the purported occurrence of any
exchange" transaction purportedly exchanging interests in Trust Preferred Securities for interests in
preferred stock of Debtor Washington Mutual, Inc. As such, the undersigned certifies: (l.) it holds
interests in securities claimed by the Debtors to constitute the "REIT Series" and described as Stich
in the Plan; and (b) it has full power and authority to vole to accept or reject the Plan, to the extent
the Plnn pertains to the Trust Preferred Securities.
lt is the undersigned's position that it remains the owner of Trust Preferred Securities, and
that such securities were not exchanged for preferred stock of Washington Mutual, Inc.
Nam.e of Claimant:
Last Four (4) Digits
Of Social Security
Number or Federal
Tax ID No.:
Signature:
Name:
I 785499 v2 WorkSiteUS-02R943/000 l

US_ACTIVE:\43915718\07\79831.0003
RLF1 5828686v. 1
EXHIBIT D

District Court Remand Order
Case 1:11-cv-01032-GMS Document 10-2 Filed 01/31/12 Page 2 of 5 PageiD #: 625
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
---------------------------------------------------------------x
In re:
1
Debtors.
---------------------------------------------------------------X
Appellants,
v.
OFFICIAL COMMITTEE OF EQUITY
SECURITY HOLDERS,
Appellee.
---------------------------------------------------------------x
AURELIUS CAPITAL MANAGEMENT, LP,
et al.,
Appellants,
v.
Appellees.
---------------------------------------------------------------x
Chapter 11
Case No. 08-12229 (MFW)
(Jointly Administered)
Civil Action No. 11-1004-GMS
1
The Debtors in the chapter 11 cases along with the last four digits of each Debtor's federal tax identification
number are: (i) Washington Mutual, Inc. (3725); and (ii) WMI Investment Corp. (5395). The Debtors' principa1
offices are located at 1201 Third Avenue, Suite 3000, Seattle, Washington 98101.
US 1.0003
RLFI 5796722v. I
---------------------------------------------------------------x
APPALOOSA MANAGEMENT L.P., et al.,
Appellants,
v.
SECURITY HOLDERS, et al.,
Appellees.
---------------------------------------------------------------X
OFFICIAL COMMITTEE OF
UNSECURED CREDITORS,
Appellant,
v.
SECURITY HOLDERS,
Appellee.
---------------------------------------------------------------X
SECURITY HOLDERS,
Appellant,
v.
AURELIUS CAPITAL MANAGEMENT, LP,
et al.,
Appellees.
---------------------------------------------------------------X
US-ACT! VE:\43907861 \05\79831.0003
RLFI 5796722v. I
2
---------------------------------------------------------------x
WELLS FARGO BANK NATIONAL
ASSOCIATION,
Appellants,
v.
BANK OF NEW YORK MELLON TRUST
COMPANY N.A., et al.,
Appellees.
---------------------------------------------------------------X
NORMANDY HILL CAPITAL LP,
Appellants,
v.
LAW DEBENTURE TRUST COMPANY
OF NEW YORK, et al.,
Appellees.
---------------------------------------------------------------x
WMB NOTEHOLDERS, et al.,
Appellants,
v.
Appellees.
---------------------------------------------------------------x
US _ACTIVE:\43907861\05\7983 L0003
RHl 5796722v. 1
3
Case 1 :11-cv-01032-GMS Document 10-2 Filed 01/31/12 Page 5 of 5 PageiD #: 628
ORDER GRANTING APPELLANTS' JOINT EMERGENCY MOTION
FOR IMMEDIATE, LIMITED REMAND OF THEIR RESPECTIVE PENDING
APPEALS TO ENABLE THE BANKRUPTCY COURT TO VACATE, IN PART,
ITS SEPTEMBER 13, 2011 ORDER AND OPINION IN CONJUNCTION WITH
CONFIRMATION PROCEEDINGS ON THE DEBTORS' SEVENTH AMENDED PLAN
The Court, having reviewed the Appellants' Joint Emergency Motion for Immediate,
Limited Remand of Their Respective Pending Appeals to Enable the Bankruptcy Court to Vacate,
In Part, Its September I 3, 20I I Order and Opinion in Conjunction with Confirmation
Proceedings on the Debtors' Seventh Amended Plan (the "Motion for Limited Remand"),
seeking limited remand of multiple appeals, as captioned above (the "September Appeals"), in
connection with the Opinion, dated September 13, 2011 [Bankr. D.I. 8612] (the "September
Opinion") and related Order, dated September 13, 2011 [Bankr. D.I. 8613] (the "September
Order") of the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"), and the Court having considered the matter;
IT IS HEREBY ORDERED that:
I. The Motion for Limited Remand is GRANTED in its entirety; and
2. The September Appeals are REMANDED solely for the limited purpose of
enabling the Bankruptcy Court to consider, in conjunction with confirmation
proceedings, vacatur of (a) the September Order to the extent it relates to the
Standing Motion and (b) those portions of the September Opinion relating to the
Standing Motion, including, but not limited to, (i) Section III (H) of the
September Opinion, pages 108 through 139, and (ii) the first sentence on page 68,
footnote 31 on page 70 and the last paragraph of Section III(D) ofthe September
Opinion, page 73.
3. In the event the Bankruptcy Court denies confirmation of the Seventh Amended
Plan, or ifthe Seventh Amended Plan is otherwise withdrawn or revoked, this
limited remand shall be of no further force and effect and the September
Appellants' appeals before this Court shall proceed unaffected
Dated: 2012
Wilmington, Delaware
US _ACTIVE:\43907861\0517983 L0003
RLFI 5796722v. l
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