Ha, ha, the feeding frenzy continues. More "bad ambiguous contracts". Seems banks are good at writing those. Of course the law favors the banks. BUT, since Chase was itself eyeball deep in bad loans, can they really say that they couldn't see this coming?
I'd like to see Jamie Dimon and Sheila Bair mud-wrestle for it. They could sell tickets and put it on Pay-Per-View. All proceeds could be used to cut the national debt. Several rounds between the gummint and the Octobanks could solve a huge problem for all of us.
Seriously, these banks are acting a bit on the desperate side now. We have BofA being snarky with investors and suing its title insurer. Chase with this nonsense.
I always thought when one company bought out another it purchased all assets and all liabilities. That's why due diligence is required. Sounds like Chase just wants the cream for itself and thinks the rest of us should be forced to drink the sour milk. BS on that!
J.P. Morgan, FDIC tangle over responsibility for WaMu liabilitiesFederal regulators and J.P. Morgan Chase - which together managed the collapse of Washington Mutual during the frenzied days of the financial crisis - are embroiled in a fight over who should cover billions of dollars from a legal mess that the failed Seattle thrift left behind.
The 2008 implosion of WaMu, as it's commonly known, was the biggest banking failure in U.S. history, prompting the Federal Deposit Insurance Corp. to take over the firm and then orchestrate a shotgun deal for J.P. Morgan to buy the bank for a paltry $1.9 billion.
But the paperwork for the merger was written so hastily over a 48-hour period that it left ambiguous who should cover the cost of WaMu's liabilities.
J.P. Morgan points the finger at the FDIC, saying that it agreed only to take on bank liabilities that were spelled out on WaMu's books during the handoff. The lawsuits weren't, hence, J.P. Morgan has said it is off the hook, according to legal filings.
The FDIC has said J.P. Morgan agreed to buy the bank, both the good and the bad.
The dispute is another reminder of the continuing fallout from the extraordinary - and very rushed - steps taken by the federal government to shore up the financial system as it was teetering on collapse. Decisions were made quickly, and the paperwork sealing massive mergers was signed without spelling out every consequence.
Ultimately, taxpayers could bear the brunt of those hasty actions. Experts say the law may indeed favor J.P. Morgan.
More here: http://www.washingtonpost.com/wp-dyn/content/article/2010/11/10/AR2010111007309.html