Remember Washington Mutual? Cute little retail bank? Kind of the anti-Chase: Lots of bright colors, no bullet-proof glass, endearingly quirky ads, free smiles? Went under a few years back and was swallowed by Chase, which gleefully ripped out all of those colors and all of that quirkiness? Well, people are still fighting over it, specifically over whether its board and leadership were being distinctly unfriendly to its shareholders when they pumped $500 million into the bank.
In a lawsuit filed on Tuesday on behalf of unpaid creditors, lawyers for the estate of Washington Mutual’s bank-holding company said the bank’s top executives should have known the bank was headed for collapse when they transferred $500 million from the holding company to the bank.
That move on Sept. 10, 2008 was a “reckless and inexplicable transaction,” the lawsuit said, adding that it didn’t make regulators less likely to seize the bank.