EX-99 2 mm08-2109_8ke991july.htm

EXHIBIT 99.1

 

 

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

In re Washington Mutual, Inc., et al.                                               Case No. 08-12229 (MFW)

Reporting Period: 07-01-09 to 07-31-09

 

MONTHLY OPERATING REPORT

REQUIRED DOCUMENTS

Form No.

Document
Attached

Explanation
Attached

Schedule of Cash Receipts and Disbursements

MOR-1

Yes

 

Bank Reconciliation (or copies of Debtors’ bank reconciliations)

MOR-1a

Refer to attached stmt

 

Schedule of Professional Fees Paid

MOR-1b

Yes

 

Copies of bank statements

MOR-1c

Refer to attached stmt

 

Cash disbursements journals

 

n/a

Refer to MOR 1 for summary of all disbursements.

Statement of Operations

MOR-2

Yes

See attached notes

Balance Sheet

MOR-3

Yes

See attached notes

Status of Postpetition Taxes

MOR-4

Yes

 

Copies of IRS Form 6123 or payment receipt

 

n/a

Payroll services outsourced including remission of taxes

Copies of tax returns filed during reporting period

 

n/a

See listing of filings

Summary of Unpaid Postpetition Debts

MOR-4

n/a

Detail on face of balance sheet.

Listing of aged accounts payable

MOR-4

Yes

 

Accounts Receivable Reconciliation and Aging

MOR-5

n/a

No trade receivables

Debtor Questionnaire

MOR-5

Yes

 

 

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the documents attached are true and correct to the best of my knowledge and belief.

 

 

 

/s/John Maciel

 

August 24, 2009

Signature of Authorized Individual*

 

Date

 

 

 

 

 

 

John Maciel

 

Chief Financial Officer

 

 

 

Printed Name of Authorized Individual

 

Title of Authorized Individual

 

 

 

*Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

 

 




DISCLAIMER

 

Washington Mutual, Inc. (“WMI”) and WMI Investment Corp. (together, the “Debtors”) caution investors and potential investors in WMI not to place undue reliance upon the information contained in this Monthly Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of WMI. The Monthly Operating Report is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Bankruptcy Court and the United States Trustee. The Monthly Operating Report was not audited or reviewed by independent accountants; does not purport to present the financial statements of WMI in accordance with generally accepted accounting principles; does not purport to present the market value of WMI’s assets and liabilities or the recoverability of WMI’s assets; is in a format prescribed by applicable bankruptcy laws; and is subject to future adjustment and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in WMI’s securities, the Monthly Operating Report is complete. Results set forth in the Monthly Operating Report should not be viewed as indicative of future results.This disclaimer applies to all information contained herein.

 

On September 26, 2008 (the “Petition Date”), the Debtors each commenced voluntary cases under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware. Prior to the Petition Date, on September 25, 2008, the Director of the Office of Thrift Supervision, appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver for Washington Mutual Bank (“WMB”) and advised that the receiver was immediately taking possession of WMB. Immediately after its appointment as receiver, the FDIC sold substantially all the assets of WMB, including the stock of Washington Mutual Bank fsb, to JPMorgan Chase Bank, National Association (“JPMorgan”) pursuant to that certain Purchase and Assumption Agreement, Whole Bank, dated as of September 25, 2008 (the “Sale”).

 

Prior to the Petition Date, WMI and WMB jointly maintained their respective financial records. As a result of the Sale, many of the Debtors’ books and records were seized by the FDIC and transferred to the custody of JPMorgan. Accordingly, the Debtors are not in control of certain information relating to their operations and financial affairs, including, but not limited to, certain accounting information. In addition, as of the date of the Sale, substantially all of WMB’s employees became employees of JPMorgan. Accordingly, this Monthly Operating Report was prepared, in part, based upon the information and work product and/or representations made available to the Debtors and their professionals by representatives of WMB and JPMorgan.

 

Results represented in this Monthly Operating Report are consistent with WMI’s accounting practices as of the Petition Date. However, records of prepetition assets and liabilities, including, among other things, liabilities owed by WMI to WMB and its affiliates are likely to be adjusted. The Debtors reserve all rights to amend the results represented in this Monthly Operating Report.

 

 


In re Washington Mutual, Inc., et al

Case No. 08-12229 (MFW)

 

 

 

Washington Mutual, Inc., et al

Case No.08-12229 (MFW)

 

 

 

 

 

 

July 2009 Monthly Operating Report -- UNAUDITED

 

 

 

 

 

 

 

 

 

MOR 1 --Schedule of Cash Receipts and Disbursements

 

 

 

 

 

 

 

 

 

 

 

Washington Mutual, Inc.

 

WMI Investment Corp.

 

Account

Deposit

Deposit

Deposit

Deposit

Money Market

General

 

Deposit

General

 

 

Bank

WMB/JPM

WMB/JPM

WMB/JPM

WMB/JPM

Bank of America

Bank of America

 

WMB/JPM

Bank of America

 

 

Bank Account

xxx0667

xxx4234

xxx9626

xxx9663

xxx0658

xxx4228

WMI

xxx4704

xxx4231

WMI Inv Corp

Combined

GL Account

70 /10450

70 / 10441

70 / 10451

70 / 10452

70 / 12510

70 /10305

Total

467 / 10450

467 / 10305

Total

Total

 

 

 

 

 

 

 

 

 

 

 

 

Opening Balance - 06/30/2009

261,650,627

3,672,480,303

4,656

748,691

123,227,724

3,817,212

4,061,929,213

53,552,387

3,589,392

57,141,779

4,119,070,992

 

 

 

 

 

 

 

 

 

 

 

 

Receipts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest & investment returns

43,011

603,695

1

123

7,379

1,516,694

2,170,903

8,804

16,792

25,596

2,196,499

Tax refunds

 

 

 

 

 

 

-

 

 

-

-

Interest - BNY Mellon trust account

 

 

 

 

 

182

182

 

 

-

182

Reimbursements/distributions from subs

 

 

 

 

 

6,293

6,293

 

 

-

6,293

Sales of assets/securities

 

 

 

 

 

 

-

 

 

-

-

Return of funds from debt trustee

 

 

 

 

 

 

-

 

 

-

-

Death benefit proceeds

 

 

 

 

 

 

-

 

 

 

-

Other miscellaneous receipts

 

 

 

 

 

1,227

1,227

 

 

-

1,227

Total Receipts

43,011

603,695

1

123

7,379

1,524,396

2,178,605

8,804

16,792

25,596

2,204,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transfers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sweep to/(from) Money Market account

 

 

 

 

(2,000,000)

2,000,000

-

 

 

-

-

Sweep to Wells Managed Account

 

 

 

 

(100,000,000)

-

(100,000,000)

 

 

-

(100,000,000)

Total Transfers

-

-

-

-

(102,000,000)

2,000,000

(100,000,000)

-

-

-

(100,000,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Disbursements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

 

 

 

327,634

327,634

-

-

-

327,634

Travel and other expenses

 

 

 

 

 

17,576

17,576

-

-

-

17,576

Occupancy and supplies

 

 

 

 

 

147,028

147,028

-

-

-

147,028

Professional fees

 

 

 

 

 

1,958,715

1,958,715

-

-

-

1,958,715

Other outside services

 

 

 

 

 

973,973

973,973

-

-

-

973,973

Bank fees

 

 

 

 

 

128,053

128,053

-

839

839

128,893

US Trustee quarterly Fees

 

 

 

 

 

20,000

20,000

-

325

325

20,325

Directors fees

 

 

 

 

 

65,000

65,000

-

-

-

65,000

Miscellaneous adjustments

 

 

 

 

 

-

-

-

-

-

-

Total Disbursements

-

-

-

-

 

3,637,978

3,637,978

-

1,164

1,164

3,639,142

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Flow

43,011

603,695

1

123

(101,992,621)

(113,582)

(101,459,373)

8,804

15,627

24,431

(101,434,941)

 

 

 

 

 

 

 

 

 

 

 

 

Cash - End of Month

261,693,638

3,673,083,998

4,657

748,814

21,235,103

3,703,630

3,960,469,840

53,561,191

3,605,019

57,166,210

4,017,636,051

 

 

 

 

 

 

 

 

 

 

 

 

GL Balance

261,693,638

3,673,083,998

4,657

748,814

21,235,103

3,703,630

3,960,469,840

53,561,191

3,605,019

57,166,210

4,017,636,050

 

 

 

 

 

 

 

 

 

 

 

 

Net value - short-term securities

 

 

 

 

 

 

647,495,125

 

 

217,334,000

864,829,125

                       

Total Cash & Cash Equivalents

4,607,964,964

274,500,210 4,882,465,175

 

                                                                                                

 


Washington Mutual, Inc., et al

Case No.08-12229 (MFW)

July 2009 Monthly Operating Report -- UNAUDITED

MOR 1a and MOR 1c -- Cash

 

 

Bank Reconciliations

 

The above-captioned debtors (the "Debtors") hereby submit this attestation regarding bank account reconciliations in lieu of providing copies of bank statements and copies of all account reconciliations.

 

I attest that each of the Debtors' bank accounts is reconciled to monthly bank statements except that certain account ending in 4234 (the "Excluded Account"). The Debtors' standard practice is to ensure that each bank account is reconciled to monthly bank statements for each calendar month

30 days after month end.

 

Recently, JPMorgan Chase Bank, National Association (“JPM”) transitioned the Excluded Account from the WaMu deposit platform to the Chase deposit platform.  Since the transition, JPM has not provided the Debtors with account statements related to the Excluded Account for each of May and June 2009.  JPM has provided a statement that reconciles to  the Debtors’ July 31, 2009 balance.

 

/s/ John Maciel

John Maciel

Chief Financial Officer

Washington Mutual, Inc.

 

 


 

Case No. 08-12229 (MFW)

Washington Mutual, Inc.

 

MOR-1B: Schedule of Professional Fees Paid

 

Month Ended July 31, 2009

 

 

 

 

 

 

Check

 

Amount Paid* - Jul'09

 

Amount Paid CTD

Payee

 

Period Covered

 

Number

 

Date

 

Fees

 

Expense

 

Fees

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akin, Gump, Strauss, Hauer & Feld LLP

 

05/1/09 - 05/31/09

 

Wire

 

07/28/09

 

$ 381,814.80

 

$ 30,871.34

 

$5,141,136.65

 

$ 181,185.09

Alvarez & Marsal

 

 

 

 

 

 

 

-

 

-

 

14,096,210.94

 

707,577.03

CONSOR Intellectual Asset Management

 

04/01/09 - 05/31/09

 

1451, 1484

 

07/02/09, 07/16/09

 

108,386.00

 

3,249.00

 

166,372.80

 

3,249.00

Davis Wright Tremaine LLP

 

04/01/09 - 04/30/09

 

1470

 

07/09/09

 

32,905.20

 

217.91

 

580,894.40

 

19,722.30

Elliott Greenleaf

 

04/01/09 - 05/31/09

 

1510

 

07/28/09

 

45,763.20

 

2,784.77

 

45,763.20

 

2,784.77

FTI Consulting, Inc.

 

05/01/09 - 05/31/09

 

Wire

 

07/23/09

 

198,264.00

 

167.36

 

2,151,056.00

 

21,169.61

Gibson, Dunn & Crutcher LLP

 

 

 

 

 

 

 

-

 

-

 

312,031.05

 

5,497.49

Grant Thornton

 

 

 

 

 

 

 

-

 

-

 

123,399.10

 

6,044.24

Joele Frank, Wilkinson Brimmer Katcher

 

05/01/09 - 06/30/09

 

1473

 

07/09/09

 

13,433.75

 

1,066.51

 

91,072.50

 

5,689.86

John W. Wolfe, P.S.

 

05/01/09 - 05/31/09

 

1486

 

07/16/09

 

62,979.60

 

109.78

 

258,438.40

 

242.50

Kurtzman Carson Consultants LLC

 

05/01/09 - 06/30/09

 

1487, 1513

 

07/16/09, 07/28/09

 

107,548.72

 

-

 

1,066,775.34

 

-

Miller & Chevalier Chartered

 

 

 

 

 

 

 

-

 

-

 

94,606.60

 

-

McKee Nelson LLP

 

 

 

 

 

 

 

-

 

-

 

434,784.35

 

7,725.80

Milliman

 

 

 

 

 

 

 

-

 

-

 

29,697.49

 

-

Pepper Hamilton LLP

 

04/01/09 - 04/30/09

 

Wire

 

07/16/09

 

75,758.80

 

5,119.92

 

1,063,122.12

 

56,197.45

Perkins Coie LLP

 

10/01/08 - 01/31/09

 

Wire

 

07/23/09

 

95,563.15

 

-

 

720,001.35

 

16,913.77

Quinn Emanuel Urquhart Oliver & Hedges

 

04/01/09 - 04/30/09

 

Wire

 

07/09/09

 

682,644.40

 

17,755.31

 

682,644.40

 

17,755.31

Richards, Layton & Finger P.A.

 

 

 

 

 

 

 

-

 

-

 

185,041.40

 

20,766.95

Shearman & Sterling LLP

 

12/01/08 - 01/31/09

 

Wire

 

07/23/09

 

92,311.10

 

-

 

591,336.70

 

16,700.20

Simpson Thacher & Bartlett LLP

 

 

 

 

 

 

 

-

 

-

 

227,906.45

 

1,746.04

Towers, Perrin, Forster & Crosby, Inc.

 

 

 

 

 

 

 

-

 

-

 

80,901.43

 

-

Weil, Gotshal & Manges LLP

 

 

 

 

 

 

 

-

 

-

 

7,531,948.00

 

182,876.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

$1,897,372.72

 

$ 61,341.90

 

$35,675,140.67

 

$ 1,273,843.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Interim fee applications for the period 10/01/08 - 01/31/09 and multiple invoices were paid during this period.

 

 

 

 

 

 

 

 

 

 


In re Washington Mutual, Inc., et al

Case No. 08-12229 (MFW)

 

 

 

Washington Mutual, Inc., et al

Case No.08-12229 (MFW)

July 2009 Monthly Operating Report -- UNAUDITED

 

MOR 2 Statement of Operations for the period 7/1/09 to 7/31/09

 

 

 

Washington Mutual, Inc.

 

WMI Investment Corp.

 

July 2009

 

Cumulative to Date

 

July 2009

 

Cumulative to Date

Revenues:

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

Cash equivalents

726,865

 

8,915,155

 

34,658

 

397,193

Securities

291,158

 

2,560,567

 

4,286

 

2,976,201

Notes receivable - intercompany

44,846

 

839,468

 

-

 

1

Other

182

 

1,029,895

 

-

 

-

Total interest income

1,063,052

 

13,345,086

 

38,944

 

3,373,395

Earnings (losses) from subsidiaries and other equity investments

5,232,067

 

(211,236,822)

 

-

 

(23,722,803)

Gains (losses) from securities / investments

14,196

 

(12,516,224)

 

4,633

 

(112,354,077)

Other income

(17,077)

 

1,978,081

 

-

 

(0)

Total revenues

6,292,237

 

(208,429,879)

 

43,577

 

(132,703,485)

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Compensation and benefits

420,066

 

4,093,905

 

-

 

-

Occupancy and equipment

102,113

 

835,528

 

-

 

-

Professional fees

317,194

 

3,746,579

 

-

 

148

Loss / (Income) from BOLI/COLI policies

(260,451)

 

(5,046,283)

 

-

 

-

Management fees / Transition services

256,249

 

1,845,026

 

-

 

-

Insurance

416,668

 

14,070,170

 

-

 

-

Other

272,441

 

947,659

 

15,640

 

368,697

Total operating expenses

1,524,280

 

20,492,584

 

15,640

 

368,845

 

 

 

 

 

 

 

 

Net profit (loss) before other income and expenses

4,767,957

 

(228,922,463)

 

27,937

 

(133,072,330)

 

 

 

 

 

 

 

 

Other income and expenses:

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

Notes payable - intercompany

-

 

-

 

-

 

-

Borrowings

-

 

-

 

-

 

-

Total interest expense

-

 

-

 

-

 

-

Other expense / (income)

-

 

(55,028,000)

 

-

 

-

 

 

 

 

 

 

 

 

Net profit (loss) before reorganization

 

 

 

 

 

 

 

items

4,767,957

 

(173,894,463)

 

27,937

 

(133,072,330)

 

 

 

 

 

 

 

 

Reorganization items:

 

 

 

 

 

 

 

Professional fees

5,396,968

 

53,767,945

 

-

 

-

US Trustee quarterly fees

10,400

 

63,400

 

325

 

5,850

Gains (losses) from sale of assets

-

 

-

 

-

 

-

Other reorganization expenses

272,686

 

5,575,869

 

-

 

-

Total reorganization items

5,680,054

 

59,407,215

 

325

 

5,850

Net profit (loss) before income taxes

(912,097)

 

(233,301,677)

 

27,612

 

(133,078,180)

 

 

 

 

 

 

 

 

Income taxes

-

 

50

 

-

 

-

 

 

 

 

 

 

 

 

Net profit (loss)

(912,097)

 

(233,301,727)

 

27,612

 

(133,078,180)

 

 

 

 

 

 

 

 

Income tax rate

0.0%

 

0.0%

 

0.0%

 

0.0%

 

 

                                                                                                

 


Washington Mutual, Inc., et al

 

Case No.08-12229 (MFW)

July 2009 Monthly Operating Report -- UNAUDITED

 

 

MOR 3 Balance Sheet as of 7/31/2009 and 9/26/2008

 

 

 

 

Washington Mutual, Inc.

 

WMI Investment Corp.

 

7/31/09

 

9/26/08

 

7/31/09

 

9/26/08

Assets:

 

 

 

 

 

 

 

Unrestricted cash and cash equivalents

4,607,964,964

 

4,018,083,009

 

274,500,210

 

52,974,376

Restricted cash and cash equivalents

98,303,994

 

145,668,884

 

-

 

-

Investment securities

65,679,021

 

59,688,627

 

-

 

266,444,881

Accrued interest receivable

870,604

 

413,253

 

10,427

 

4,084,658

Accounts receivable

-

 

-

 

-

 

-

Income tax receivable

477,979,473

 

742,680,150

 

22,187,560

 

22,187,560

Prepaid expenses

1,910,522

 

11,311,510

 

-

 

-

Cash surrender value of BOLI/COLI

88,000,345

 

84,039,738

 

-

 

-

Funded Pension

39,173,922

 

638,870,071

 

-

 

-

Other investments

2,092,488

 

23,668,909

 

40,715,371

 

65,952,708

Investment in subsidiaries

1,475,193,890

 

1,895,218,467

 

-

 

-

Notes receivable - intercompany

12,229,590

 

58,001,133

 

565,844,197

 

565,844,197

Fixed Assets

108,175

 

-

 

-

 

-

Other assets

79,057,611

 

23,489,277

 

-

 

-

Total assets

6,948,564,599

 

7,701,133,028

 

903,257,765

 

977,488,380

 

 

 

 

 

 

 

 

Liabilities not subject to compromise (Postpetition):

 

 

 

 

 

 

 

Accounts payable

6,723,731

 

-

 

-

 

-

Taxes payable

-

 

-

 

-

 

-

Accrued wages and benefits

912,405

 

-

 

-

 

-

Other accrued liabilities

15,349,508

 

-

 

15,125

 

-

Rent and equipment lease payable

-

 

-

 

-

 

-

Deferred tax liability / (asset)

-

 

-

 

-

 

-

Other Liabilities - Intercompany

-

 

-

 

-

 

-

Other post-petition liabilities

-

 

-

 

-

 

-

Minority interest

1,113,019

 

3,104,022

 

-

 

-

Total post-petition liabilities

24,098,663

 

3,104,022

 

15,125

 

-

 

 

 

 

 

 

 

 

Liabilities subject to compromise (Pre-petition):

 

 

 

 

 

 

 

Senior debt

4,108,911,139

 

4,108,911,139

 

-

 

-

Subordinated debt

1,613,991,512

 

1,613,991,512

 

-

 

-

Junior subordinated debt

742,476,453

 

742,476,453

 

 

 

 

Accrued interest payable

75,907,764

 

75,907,764

 

-

 

-

Intercompany payables

684,095,259

 

684,095,258

 

-

 

-

Accounts payable

4,480,720

 

3,941,450

 

-

 

-

Taxes payable

550,080,833

 

550,080,833

 

-

 

-

Payroll and benefit accruals

407,236,707

 

407,215,221

 

-

 

-

Other accrued liabilities

86,421,167

 

92,259,015

 

-

 

-

Other pre-petition liabilities

198

 

223

 

-

 

-

Total pre-petition liabilities

8,273,601,752

 

8,278,878,868

 

-

 

-

 

 

 

 

 

 

 

 

Total liabilities

8,297,700,415

 

8,281,982,890

 

15,125

 

-

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

Preferred stock

3,392,341,954

 

3,392,341,953

 

-

 

-

Common stock

12,988,753,556

 

12,988,753,556

 

1,000,000,000

 

1,000,000,000

Other comprehensive income

(755,124,817)

 

(222,770,180)

 

22,187,560

 

(36,644,880)

Retained earnings - pre-petition

(16,741,804,781)

 

(16,739,175,191)

 

14,133,260

 

14,133,260

Retained earnings - post-petition

(233,301,727)

 

-

 

(133,078,180)

 

-

Total shareholders' equity

(1,349,135,816)

 

(580,849,862)

 

903,242,640

 

977,488,380

 

 

 

 

 

 

 

 

Total liabilities and shareholder's equity

6,948,564,599

 

7,701,133,028

 

903,257,765

 

977,488,380

 


In re Washington Mutual, Inc., et al

Case No. 08-12229 (MFW)

 

 

NOTES TO MOR-2 and MOR-3

Note 1:  Washington Mutual Preferred Funding

 

On September 25, 2008, the Office of Thrift Supervision concluded that an “Exchange Event” had occurred with respect to the following securities (the “Securities”):

 

 

Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-cumulative Preferred Securities, Series A-1 (to be exchanged into depositary shares representing Series J Perpetual Non-Cumulative Fixed Rate Preferred Stock of Washington Mutual, Inc. (“WMI”));

 

 

Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-cumulative Preferred Securities, Series A-2 (to be exchanged into depositary shares representing Series J Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI);

 

 

Washington Mutual Preferred Funding Trust I Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series I Perpetual Non-Cumulative Fixed-to-Floating Rate Preferred Stock of WMI);

 

 

Washington Mutual Preferred Funding Trust II Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series L Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI);

 

 

Washington Mutual Preferred Funding Trust III Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series M Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI); and

 

 

Washington Mutual Preferred Funding Trust IV Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series N Perpetual Non-Cumulative Fixed-to-Floating Rate Preferred Stock of WMI).

 

In accordance with the terms of the documents governing the Securities, the Conditional Exchange of the Securities occurred on Friday, September 26, 2008 at 8:00 A.M. (New York time). The documentation governing the Securities contemplates that at the time of the Conditional Exchange, each outstanding Security was intended to be exchanged automatically for a like amount of newly issued Fixed Rate Depositary Shares or newly issued Fixed-to-Floating Rate Depositary Shares, as applicable, each representing a 1/1000th interest in one share of the applicable series of preferred stock of WMI. If and until such depositary receipts are delivered or in the event such depositary receipts are not delivered, any certificates previously representing Securities are deemed for all purposes, effective as of 8:00 AM (New York time) on September 26, 2008, to represent Fixed Rate Depositary Shares or Fixed-to-Floating Rate Depositary Shares, as applicable.

 

WMI and its advisors are currently assessing a number of legal, accounting and tax issues related to the Securities and the transactions related to the Conditional Exchange. Because of these unresolved issues, WMI has not yet reflected the Conditional Exchange and/or its attendant transactions on its financial statements, including any possible interests (direct or indirect, contingent or otherwise) in the Securities and the assets, as the case may be, of Washington Mutual Preferred Funding LLC.

 

Assuming that the Conditional Exchange had been completed in accordance with the terms of the relevant documentation, on a pro forma basis, WMI’s financial statements would reflect (a) a credit to shareholders’ equity of approximately $3.9 billion upon issuance of the new classes of preferred stock; (b) an investment in subsidiary (i.e. WMB) of approximately $3.9 billion upon contribution of the Preferred Securities by WMI to WMB; and (c) an immediate and corresponding write-down of such investment in subsidiary.

 

 

 

                                                                                                

 


Note 2:  Restricted Cash and Cash Equivalents

 

WMI’s restricted cash and cash equivalents of $98 million includes $40 million of accumulated dividends related to amounts held in escrow pertaining to that certain action styled as American Savings Bank, F.A et al. v United States, Case No 92-872C pending in the United States Court of Federal Claims, $53 million in a deposit account pledged as collateral to secure prepetition intercompany transactions between WMI and WMB and $5 million held as part of a Rabbi Trust.

 

Note 3:  Investment in Subsidiaries

 

WMI’s investment in subsidiaries represents the book value of WMI’s subsidiaries, including WMI Investment Corp. (“WMI Investment”).This balance does not represent the market value of these entities.

 

WMI subsidiaries hold unsecured notes receivable from WMB or JPMorgan, as the case may be, totaling approximately $179 million.

 

Note 4:  Funded Pension

 

The funded pension balance reflects the (1) the market value of assets as of December 2, 2008 less (2) the November 2008 actuarial estimated settlement value of September 25, 2008 liabilities. The value does not reflect any recent changes in market values, interest rate assumptions and the participants since November 2008 which could materially affect the results.

 

Note 5:  Taxes

 

The tax asset and liability balances are recorded consistent with WMI’s historical accounting practices as of the Petition Date and adjusted for refunds collected.Generally, tax related claims and payables are recorded on WMI’s books and records on a consolidated basis with the other members of the consolidated tax group and have not been adjusted for any potential claims against these assets. The current recorded balances do not reflect all expected refunds or payments as these amounts are currently being reviewed. The current estimate for the total expected refunds, net of potential payments, is in the range of approximately $2.6 - $3.0 billion. WMI understands that JPMorgan, the purchaser of substantially all of WMB’s assets, may seek to claim all or a portion of the expected tax refunds.

 

No provision or benefit from income taxes has been recorded as the NOL’s are expected to be sufficient to offset income during the reported period. Income tax expense contains alternative minimum taxes paid in certain states.

 

 

Note 6:  Liabilities Subject to Compromise (Pre-Petition) – Payroll and benefit accruals

 

WMI’s pre-petition payroll and benefit accruals include balances reflecting WMI’s historic accounting policies related to pension accounting. Prior to the Petition Date, WMI recorded a $274 million liability in respect of such accruals and WMB recorded a $274 million asset, which amounts were netted out and eliminated on a consolidated basis. Neither balance was reported as an intercompany balance. WMI is analyzing these accounting entries and treatment within the context of its bankruptcy proceedings.

 


Washington Mutual, Inc. / WMI Investment Corp.

Case No.08-12229 (MFW)

July 2009 Monthly Operating Report -- UNAUDITED

 

MOR 4 Status of Postpetition Taxes

 

 

 

 

 

Washington Mutual, Inc.

 

WMI Investment Corp

 

 

 

 

Beginning Tax Liability

Amt approved for pmt

Taxes collected

Taxes remitted

Closing Balance Post Petition

Beginning Tax Liability

Amt approved for pmt

Taxes collected

Taxes remitted

Closing Balance Post Petition

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal

NOTES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding

 

 

29,505.00

 

61,253.29

(60,535.29)

30,223.00

 

 

 

 

-

FICA -- Employee

 

 

4,994.08

 

10,487.78

(10,517.18)

4,964.68

 

 

 

 

-

FICA -- Employer

 

 

4,994.08

10,487.78

 

(10,517.18)

4,964.68

 

 

 

 

-

Unemployment

 

 

80.37

31.63

 

 

112.00

 

 

 

 

-

Income

**

 

 

 

 

 

-

 

 

 

 

-

Other:

 

 

 

 

 

 

-

 

 

 

 

-

Total Federal

 

 

39,573.53

10,519.41

71,741.07

(81,569.65)

40,264.36

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

State and Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding

n/a

 

 

 

 

 

 

 

 

 

 

 

Sales/Use

***

 

 

 

 

 

-

 

 

 

 

 

Unemployment

 

 

1,452.01

254.72

 

(1,452.01)

254.72

 

 

 

 

 

Disability

 

 

1,164.30

238.00

158.27

(1,164.30)

396.27

 

 

 

 

 

Real Property

n/a

 

 

 

 

 

-

 

 

 

 

 

Personal Property

n/a

 

 

 

 

 

-

 

 

 

 

 

Other

****

 

5,184.59

858.81

-

(5,184.59)

858.81

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

Total State and Local

 

 

7,800.90

1,351.53

158.27

(7,800.90)

1,509.80

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Taxes

 

 

47,374.43

11,870.94

71,899.34

(89,370.55)

41,774.16

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTES

 

**WMI has booked no federal income tax on its post-petition income tax provision, nor has it made any federal payments. WMI has booked $50.00 of state income tax on its post-petition income tax provision for its 2008 Arizona corporate income tax extension payment that was paid in April 2009.

***WMI does not have any Washington or City of Seattle sales/use tax liability for the month of July.

**** WMI reported and remitted $2,550.92 in Seattle Business License Tax liability to the City of Seattle on July 8, 2009. This remittance covered the post-bankruptcy period of 2008 Q4 (Oct,Nov, Dec) and 2009 Q1 (Jan, Feb, Mar). In addition, WMI reported and remitted $2,062.93 in WA B&O tax for 2009 Q2; and $570.74 in Seattle Business License Tax Liability for 2009 Q2, on July 27, 2009. WMI accrued $672.70 in WA B&O tax liability for July 2009; and $186.11 of Seattle business license tax liability for July 2009. 2009 Q3 returns covering the months of July, August, and September will be filed on October 31, 2009.

 

I attest that all tax returns have been filed in accordance withfederal / state / county / city requirements for the above period.

 

 

/s/ John Maciel

John Maciel

Chief Financial Officer

Washington Mutual, Inc., et al

 

 


Washington Mutual, Inc. and WMI Investment Corp.

 

 

Tax Return Filings

 

 

For the Period 7/01/2009 through 7/31/2009

 

 

 

 

 

Property Tax Filings: 

 

 

 

 

 

 

 

No property tax returns were filed during the period 7/01/2009 through 7/31/2009.

 

 

 

 

 

 

 

 

 

 

 

 

Sales/Use Tax Filings: 

 

 

 

 

 

 

 

No sales/use tax returns were filed during the period 7/01/2009 through 7/31/2009.

 

 

 

 

 

 

 

 

 

 

 

 

Payroll Tax Filings: 

 

 

 

 

 

 

 

Entity

Jurisdiction

Filing Description

Due Date

Date Filed

WMI

IRS (Federal)

Withholding summary of deposits and filings (semi-weekly)

7/03/2009

7/03/2009

WMI

IRS (Federal)

Withholding summary of deposits and filings (semi-weekly)

7/15/2009

7/15/2009

WMI

IRS (Federal)

Withholding summary of deposits and filings (semi-weekly)

7/22/2009

7/22/2009

WMI

Washington

Unemployment summary of deposits and filings (quarterly)

7/31/2009

7/31/2009

WMI

Washington

Labor and industries (quarterly)

7/31/2009

7/31/2009

 

 

 

 

 

 

 

 

 

 

Corporate Income Tax/Franchise Tax/Gross Receipts Tax Filings:

 

 

 

 

 

 

 

Entity

Jurisdiction

Filing Description

Due Date

Date Filed

WMI

City of Seattle

Business and occupation tax return (quarterly)

*

7/08/2009

WMI

City of Seattle

Business and occupation tax return (quarterly)

*

7/08/2009

WMI

Washington

Business and occupation tax return (quarterly)

7/31/2009

7/27/2009

WMI

City of Seattle

Business and occupation tax return (quarterly)

7/31/2009

7/27/2009

 

 

 

 

 

 

* Following WMI's bankruptcy filing, the City of Seattle closed WMI's business and occupation tax account.However, WMI subsequently determined that it was liable for business and occupation tax despite being in bankruptcy.The City of Seattle reopened WMI's account, and WMI filed business occupation tax returns for the periods 2008 Q4 and 2009 Q1 to the City of Seattle on July 8, 2009.These returns were treated as being timely filed by the City of Seattle as no penalty or interest was assessed.Going forward, WMI will report and remit business and occupation tax to the City of Seattle on a quarterly basis.

 


 

 

 

Case No. 08-12229 (MFW)

Washington Mutual, Inc.

 

 

MOR-4: Post Petition Accounts Payable Aging by Vendor

 

 

As ofJuly 31, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vendor

 

Current *

 

31 - 60

 

61- 90

 

91 and Over

 

Total

 

 

 

 

 

 

 

 

 

 

 

Akin, Gump, Strauss, Hauer & Feld LLP

 

$479,389.60

 

$-

 

$-

 

$ -

 

$479,389.60

Alvarez & Marsal

 

2,766,225.86

 

-

 

-

 

-

 

2,766,225.86

Chin, Jodi M.

 

509.92

 

-

 

-

 

-

 

509.92

CONSOR Intellectual Asset Management

 

41,593.20

 

-

 

-

 

-

 

41,593.20

CP Energy Group, LLC

 

49,349.59

 

-

 

-

 

-

 

49,349.59

Davis Wright Tremaine LLP

 

36,137.20

 

-

 

-

 

-

 

36,137.20

Depository Trust Company

 

1,472.00

 

-

 

-

 

-

 

1,472.00

Elliott Greenleaf

 

69,549.07

 

-

 

-

 

-

 

69,549.07

FTI Consulting, Inc.

 

188,742.50

 

-

 

-

 

-

 

188,742.50

Gibson, Dunn & Crutcher LLP

 

152,548.84

 

-

 

-

 

-

 

152,548.84

Grant Thornton

 

36,329.90

 

-

 

-

 

-

 

36,329.90

Integra Telecom

 

3,340.61

 

-

 

-

 

-

 

3,340.61

Intralinks

 

(1,300.00)

 

-

 

-

 

-

 

(1,300.00)

John W. Wolfe, P.S.

 

99,512.10

 

-

 

-

 

-

 

99,512.10

Live Technology

 

3,000.00

 

-

 

-

 

-

 

3,000.00

Mark Monitor, Inc.

 

12,900.00

 

-

 

-

 

-

 

12,900.00

Master License Service (WA)

 

59.00

 

-

 

-

 

-

 

59.00

McKee Nelson LLP

 

344,433.83

 

-

 

-

 

-

 

344,433.83

Miller & Chevalier Chartered

 

32,674.40

 

-

 

-

 

-

 

32,674.40

Pepper Hamilton LLP

 

169,251.55

 

-

 

-

 

-

 

169,251.55

Perkins Coie LLP

 

194,758.35

 

-

 

-

 

-

 

194,758.35

PricewaterhouseCoopers LLP

 

873,987.99

 

-

 

-

 

-

 

873,987.99

Quinn Emanuel Urquhart Oliver & Hedges

 

958,617.90

 

-

 

-

 

-

 

958,617.90

Richards, Layton & Finger P.A.

 

27,617.99

 

-

 

-

 

-

 

27,617.99

Shearman & Sterling LLP

 

47,807.68

 

-

 

-

 

-

 

47,807.68

Simpson Thacher & Bartlett LLP

 

132,279.12

 

-

 

-

 

-

 

132,279.12

Smith, Charles E.

 

2,043.22

 

-

 

-

 

-

 

2,043.22

Z7 Networks, LLC

 

900.00

 

-

 

-

 

-

 

900.00

 

 

 

 

 

 

 

 

 

 

 

Total

 

$6,723,731.42

 

$-

 

$-

 

$ -

 

$ 6,723,731.42

 

NOTES

*Any holdback for professionals pursuant to their respective retention orders are included in “Current.”

** Unapplied credit.

 

 

DEBTOR QUESTIONNAIRE

Must be completed each month

Yes

No

1.  Have any assets been sold or transferred outside the normal course of business
this reporting period? If yes, provide an explanation below.

 

X

2.  Have any funds been disbursed from any account other than a debtor in possession
account this reporting period? If yes, provide an explanation below.

X

 

3.  Have all postpetition tax returns been timely filed? If no, provide an explanation
below.

X

 

4.  Are workers compensation, general liability and other necessary insurance
coverages in effect? If no, provide an explanation below.

X

 

5.  Has any bank account been opened during the reporting period? If yes, provide
documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.

X

 

 

 

Explanations

 

2.

Pursuant to an order of the Bankruptcy Court dated October 8, 2008, the Debtors were authorized to continue using existing bank accounts and to open new debtor in possession bank accounts.

 

5.

New accounts opened during the reporting period:

 

 

Company

Bank

Account Number

 

 

Washington Mutual, Inc.

Wells Fargo/Wells Capital Mgmt

xxxx7300

 

WMI Investment Corp

Wells Fargo/Wells Capital Mgmt

xxxx7200