NEW YORK (
(WAMUQ.PK) shareholders will meet Monday in Delaware to set up a committee to represent their interests in the bankruptcy of the failed Seattle thrift.
The U.S. trustee assigned to the case last month surprised some observers when it revealed in court hearings that it wanted to explore the formation of such a committee. WaMu's own lawyers have argued in court they believe the common shares are worthless.
Nonetheless, the announcement of a meeting date appears to have sparked a rally in the shares, which were up more than 15% on heavier-than-usual volume on Thursday
The hopes of common shareholders for a recovery would seem to depend upon their winning a lawsuit against WaMu acquirer
, and then extracting a very large settlement. The suit argues the bank "exploited a perceived liquidity crisis in the banking industry to improperly and illegally take advantage of the financial difficulties of Washington Mutual, Inc."
, and continue to believe, that there are important questions surrounding WaMu's failure that need airing. Whether that means there is value in the common shares is for the courts to decide.
Written by Dan Freed in New York