A settlement is being negotiated in the lawsuit by federal regulators against three top Washington Mutual officials, according to court papers filed Thursday.
“The parties have now exchanged settlement term sheets reflective of a potential settlement. The parties are diligently working to resolve their remaining disputes,” a lawyer for the Federal Deposit Insurance Corp. wrote in a request to postpone deadlines for further filings in the case.
The FDIC document adds that additional sessions with a mediator are planned for June 29 and 30 “in the event they are unable to resolve the matters at issue in the interim.”
In March, the Federal Deposit Insurance Corp. alleged that Seattle-based WaMu lost billions of dollars due to negligence of Kerry Killinger, WaMu’s former CEO; Stephen Rotella, former chief operating officer; and David Schneider, former president of WaMu’s Home Loans division. The suit also names Killinger’s wife, Linda, and Rotella’s wife, Esther, claiming they participated in transferring assets into trusts where they would be out of creditors’ reach.
The FDIC sought more than $900 million from the executives in private negotiations preceding the lawsuit, a source familiar with the matter said.
The suit, filed in federal court in Seattle, doesn’t specify how much in damages the FDIC seeks to collect.
News of the potential settlement was reported Friday morning in the Wall Street Journal online.