createpositivechange

Tag: Washington Mutual

  • WaMu seized by federal regulators, sold to JPMorgan Chase (Muckety.com)

    David Bonderman and Alan Fishman got a big surprise yesterday from the federal government.

    Bonderman, founder of TPG private equity firm, was a major investor in the struggling Washington Mutual. Fishman became CEO of the bank just three weeks ago.

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    In the nation’s biggest bank failure to date, the FDIC seized WaMu last night, and then quickly sold it to JPMorgan Chase for $1.9 billion.

    Bonderman, a former WaMu director who led a $7 billion investment in the company in April, will lose big. Fishman, however, has a golden parachute.

    The New York Times reports that Fishman will keep his $7.5 million signing bonus and is eligible for another $11.6 million in severance pay.

    With $307 billion in assets, WaMu was a threat to the solvency of the FDIC, which insures customer bank accounts up to $100,000 per person, per institution. The federal insurance fund,depleted by the earlier failure of IndyMac Bank, totaled just $45.2 billion at the end of June.

    The Times reports that the WaMu takover was a shock to the company’s board as well as its CEO, who was flying from New York to Seattle when the deal was completed.

    TPG released a statement yesterday, saying simply: “Obviously, we are dissatisfied with the loss to our partners from our investment in Washington Mutual.”

    The Wall Street Journal’s report today was equally bleak:

    The fact that no bank was willing to buy WaMu until it failed shows how badly confidence has eroded in a banking system awash with record profits just a few years ago. Faced with deepening losses on mortgages, credit cards and other loans, big and small banks across the country are struggling with what many bank executives say is a crisis far deeper than the savings-and-loan debacle.

    This is the second fire sale in which JPMorgan has acted as buyer. The company bought Bear Stearns in March.

    ([Muckety.com](https://createpositivechange.org/2008/09/26/wamu-seized-by-federal-regulators-sold-to-jpmorgan-chase/5222)

  • Bonderman looks long term with Washington Mutual (Muckety)

    Washington Mutual shareholders approved a $7 billion infusion from TPG and other investors yesterday, thereby blessing — they had little choice — the return of Texas deal maker David Bonderman to the company’s board of directors. The decision came on a day when WaMu stock hit a 16-year low.

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    TPG co-founder Bonderman, who started his investment career with Robert Bass in Fort Worth, has made it clear that his interest in Washington Mutual is long term.

    “Where WaMu gets to is more important than when it gets there,” he told the Financial Times last week. “This is the strength of private equity. We can be patient.”

    Analysts estimate that the Seattle-based lender faces billions more in loan losses over the next few years.

    Bonderman’s first tour of duty on the WaMu board ran from 1997 to 2002 after Washington Mutual bought American Savings & Loan. Bonderman had been with the Robert M. Bass Group when it bought the insolvent S&L from the federal government in 1988.

    The TPG deal with WaMu was announced in April. Gretchen Morgenson, writing in The New York Times, has called it a “sweet package” for TPG and other investors, even though the price of WaMu stock has declined since the deal was made.

    In the FT article, reporter Henny Sender called Bonderman and his TPG partner, James Coulter, “probably the most successful-ever private equity investment team.” Last year, TPG completed the buyout of TXU, one of the largest electric utilites in the United States. Sender’s article is worth reading just for the anecdote about how Bonderman’s partners have “banned him from setting foot in Japan.”

    Bonderman’s position on the WaMu board gives it a decidedly North Texas tilt. Director Tom Leppert is the mayor of Dallas and Regina Montoya lives in Dallas. Bonderman lives in Fort Worth.

    ([Muckety](https://createpositivechange.org/2008/06/25/bonderman-looks-long-term-with-washington-mutual/3672)

  • Washington Mutual Details Class Action Suits

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