The mediator trying to broker an end to the hostilities in the Washington Mutual Inc. Chapter 11 case has pushed off his first report to the bankruptcy court until December.
Judge Raymond T. Lyons, the mediator, was due on Tuesday to update the judge overseeing Washington Mutual's case, Judge Mary Walrath. However, a note Monday on the docket of Walrath's court in Wilmington, Del., says Lyons, a New Jersey bankruptcy judge, believes the mediation should be continued until Dec. 8, the company's next regular court hearing date.
In the meantime, a stay is in effect on Walrath's ruling rejecting Washington Mutual's Chapter 11 plan for the second time.
When she issued the decision, Walrath said she hoped mediation would cut short the continuing court fights that have held up Washington Mutual's Chapter 11 bankruptcy payout.
Every month of delay is eating $30 million out of the recovery marked for the lowest-ranking creditors who are due to be paid, as interest adds up on the top-ranking debt in the case.
Washington Mutual, the former parent of Washington Mutual Bank, filed for Chapter 11 protection in September 2008 after the thrift was seized and sold by regulators who feared it was on the point of collapse.
About $7 billion in value is stored up in Washington Mutual's Chapter 11 coffers, awaiting a final nod from Walrath on a bankruptcy exit plan that leaves shareholders with nothing.
Shareholders twice succeeded in blocking confirmation of the Chapter 11 plan.
