IN RE WASHINGTON MUT., INC.

No. 08-12229 (MFW).

461 B.R. 200 (2011)

In re WASHINGTON MUTUAL, INC., et al., Debtors.

United States Bankruptcy Court, D. Delaware.

September 13, 2011.


Attorney(s) appearing for the Case

Mark D. Collins, Esquire , Chun I. Jang, Esquire , Lee E. Kaufman, Esquire , Richards, Layton & Finger, P.A., Wilmington, DE, Brian S. Rosen, Esquire , Marcia L. Goldstein, Esquire , Michael F. Walsh, Esquire , Weil Gotshal & Manges, LLP, New York, NY, for Debtors.

Rafael X. Zahralddin-Aravena, Esquire , Neil R. Lapinski, Esquire , Shelley A. Kinsella, Esquire , Elliott Greenleaf , Wilmington, DE, Peter E. Calamari, Esquire , Michael B. Carlinsky, Esquire , Susheel Kirpalani, Esquire , David Elsberg, Esquire , Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, Special Litigation and Conflicts Counsel for Debtors.

Robert S. Brady, Esquire , M. Blake Cleary, Esquire , Jaime N. Luton, Esquire , Young Conaway Stargatt & Taylor, LLP Wilmington, DE, Thomas R. Califano, Esquire , John J. Clark, Jr., Esquire , DLA Piper LLP, New York, NY, for FDIC Receiver.

Jeffrey M. Schlerf, Esquire , Eric M. Sutty, Esquire , Fox Rothschild LLP, Wilmington, DE, David S. Rosner, Esquire , Adam L. Shiff, Esquire , Paul M. O'Connor, Esquire , Seth A. Moskowitz, Esquire , Kasowitz, Benson, Torres & Friedman LLP, New York, NY, for Washington Mutual, Inc. Noteholders' Group.

David B. Stratton, Esquire , Evelyn J. Meltzer, Esquire , Pepper Hamilton LLP, Wilmington, DE, Fred S. Hodara, Esquire , Robert A. Johnson, Esquire , Akin Gump Strauss Hauer & Feld LLP, New York, NY, for Official Committee of Unsecured Creditors.

Jane M. Leamy, Esquire , Office of the United States Trustee, Wilmington, DE.

Adam G. Landis, Esquire , Matthew B. McGuire, Esquire , Landis, Rath & Cobb, LLP, Wilmington, DE, Robert A. Sacks, Esquire , Stacey R. Friedman, Esquire , Brian D. Glueckstein, Esquire , Sullivan & Cromwell LLP, New York, NY, Brent J. McIntosh, Esquire , Sullivan & Cromwell LLP, Washington, DC, for JP Morgan Chase Bank, N.A.

Bernard G. Conaway, Esquire , Marla Rosoff Eskin, Esquire , Kathleen Campbell Davis, Esquire , Campbell & Levine LLC, Wilmington, DE, Sigmund S. Wissner-Gross, Esquire , Robert J. Stark, Esquire , Katherine S. Bromberg, Esquire , Brown Rudnick LLP, New York, NY, James W. Stoll, Esquire , Jeremy B. Coffey, Esquire , Jennifer M. Recht, Esquire , Ryan S. Moore, Esquire , Daniel J. Brown Esquire , Brown Rudnick LLP, Boston, MA, for TPS Holders.

Mark E. Felger, Esquire , Cozen O'Connor , Wilmington, DE, Co-Counsel for Broadbill Investment Corp.

Paul N. Silverstein, Esquire , Jeremy B. Reckmeyer, Esquire , Andrews Kurth LLP, New York, NY, for Broadbill Investment Corp.

Scott J. Leonhardt, Esquire , Frederick B. Rosner, Esquire , The Rosner Law Group LLC, Wilmington, DE, Arthur Steinberg, Esquire , King & Spalding, Jonathan Hochman, Esquire , Schindler Cohen & Hochman LLP, New York, NY, for Nantahala Capital Partners LP and Blackwell Capital Partners LLC.

David P. Primack, Esquire , Drinker Biddle & Reath LLP, Jay W. Eisenhofer, Esquire , Geoffrey C. Jarvis, Esquire , Christine M. Mackintosh , Grant & Eisenhofer P.A., Wilmington, DE, Jeffrey M. Schwartz, Esquire , Chicago, IL, for WMB Noteholders.

Michael P. Migliore, Esquire , Smith, Katzenstein & Jenkins LLP, Wilmington, DE, Andrew J. Mytelka, Esquire , Frederick E. Black, Esquire , Tara B. Annweiler, Esquire , James M. Roquemore, Esquire , Galveston, TX, for North America National Insurance Company, American National Property and Casualty Company, Farm Family Life Insurance Company, Farm Family Casualty Insurance Company, and, National Western Life Insurance Company.

Philip Schnabel (Pro se), Radeberg, Germany, Objector to Confirmation.

Ronald S. Gellert, Esquire , Byra M. Keilson, Esquire , Eckert Seamans Cherin & Mellott, LLC, Wilmington, DE, Matthew Feldman, Esquire , Robin Spigel, Esquire , Willkie Farr & Gallagher LLP, New York, NY, for Truck Insurance Company and Fire Insurance Company.

Edward W. Ciolko, Esquire , Joshua C. Schumacher, Esquire , Barroway Topaz Kessler Meltzer & Check, LLP, Radnor, PA, for Objectors to Confirmation, Robert Alexander & James Lee Reed.

William P. Bowden, Esquire , Gregory A. Taylor, Esquire , Stacy L. Newman, Esquire , Ashby & Geddes, P.A., Wilmington, DE, Stephen D. Susman, Esquire , Seth D. Ard, Esquire , Susman Godfrey, L.L.P., New York, NY, Parker C. Foise, Esquire , Edgar Sargent, Esquire , Justin A. Nelson, Esquire , Susman Godfrey, L.L.P., Seattle, WA, for the Official Committee of Equity Security Holders of Washington Mutual, Inc., et al.

Jeffrey S. Schultz (Pro se), Vice President/Trust Investment Officer, American National Bank, Wichita Falls, TX, Objector to Confirmation.

Nate Thoma (Pro se), Wenonah, NJ, Objector to Confirmation.

Donna L. Harris, Esquire , Pinckney, Harris & Weidinger, LLC, Wilmington, DE, Robert T. Scott, Esquire , Axicon Partners, LLC, New York, NY, for Sonterra Capital Partners and Sonterra Capital LLC.


OPINION1

MARY F. WALRATH, Bankruptcy Judge.

Before the Court is the request of Washington Mutual, Inc. ("WMI") and WMI Investment Corp. (collectively the "Debtors") for confirmation of the Modified Sixth Amended Joint Plan of Affiliated Debtors (the "Modified Plan"). For the reasons stated below, the Court will deny confirmation of the Modified Plan.

I. BACKGROUND

WMI is a bank holding company...

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