Case MFW Doc Filed 05/10/16 Page 1 of 24 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE : : : : : : : : : :

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1 Case MFW Doc Filed 05/10/16 Page 1 of 24 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re WASHINGTON MUTUAL, INC., et al., 1 Debtors. Chapter 11 Case No (MFW) Jointly Administered Hearing Date June 2, 2016 at 1030 a.m. (ET) Obj. Deadline May 24, 2016 at 400 p.m. (ET) MOTION OF JPMORGAN CHASE BANK, N.A. FOR ENFORCEMENT OF THE FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER CONFIRMING THE SEVENTH AMENDED JOINT PLAN OF AFFILIATED DEBTORS PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE 1 The Debtors in these chapter 11 cases and the last four digits of each Debtor s federal tax identification number are (a) Washington Mutual, Inc. (3725); and (b) WMI Investment Corp. (5395). The principal offices of WMI Liquidating Trust, as successor in interest to the Debtors, are located at 1201 Third Avenue, Suite 3000, Seattle, Washington

2 Case MFW Doc Filed 05/10/16 Page 2 of 24 TABLE OF CONTENTS PRELIMINARY STATEMENT...1 RELEVANT BACKGROUND...3 A. The Chapter 11 Cases...3 B. The Global Settlement Agreement...3 C. Global Settlement Approval and Plan Confirmation...5 D. Litigation Tracking Warrant Litigation...6 E. Plaintiffs Improper Complaint Filed in Ohio...7 JURISDICTION...8 RELIEF REQUESTED...9 BASIS FOR RELIEF REQUESTED...9 I. PLAINTIFFS CLAIMS ARE BARRED BY THE CONFIRMATION ORDER....9 II. III. IV. THE COMPLAINT IS AN IMPROPER COLLATERAL ATTACK ON THE CONFIRMATION ORDER AND THE GLOBAL SETTLEMENT THIS COURT HAS CONCLUSIVELY DETERMINED THAT THE LTW HOLDERS HAVE NO INTEREST IN THE ANCHOR LITIGATION ITSELF...15 JPMC SHOULD BE AWARDED ITS ATTORNEYS FEES AND EXPENSES NOTICE...19

3 Case MFW Doc Filed 05/10/16 Page 3 of 24 TABLE OF AUTHORITIES Page(s) CASES Brown v. Wells Fargo Bank, N.A., 25 F. Supp. 3d 144 (D.D.C. 2014)...17 Celotex Corp. v. Edwards, 514 U.S. 300 (1995)...14 In re Continental Airlines, Inc., 236 B.R. 318 (Bankr. D. Del. 1999)...18 In re Grumman Olson Industries, Inc., 445 B.R. 243 (Bankr. S.D.N.Y. 2011)...10 In re NE Opco, Inc., 513 B.R. 871 (Bankr. D. Del. 2014)...8, 10 Peloro v. U.S., 488 F.3d 163 (3d Cir. 2007)...15, 16 In re Szostek, 886 F.2d 1405 (3d Cir. 1989)...15 In re Trans World Airlines, Inc., 322 F.3d 283 (3d Cir. 2009)...10 Travelers Indemnity Co. v. Bailey, 557 U.S. 137 (2009)...8, 14 In re Washington Mutual, Inc., 442 B.R. 314 (Bankr. D. Del 2011)...5, 11, 12 In re Washington Mutual, Inc., 464 B.R. 656 (Bankr. D. Del. 2012)... passim In re Washington Mutual, Inc., Case No , 2012 WL (Bankr. D. Del. Feb. 24, 2012)... passim In re Worldwide Direct, Inc., 334 B.R. 112 (Bankr. D. Del. 2005) ii-

4 Case MFW Doc Filed 05/10/16 Page 4 of 24 STATUTES 11 U.S.C passim 11 U.S.C U.S.C iii-

5 Case MFW Doc Filed 05/10/16 Page 5 of 24 JPMorgan Chase Bank, N.A. ( JPMC ) hereby submits this motion (the Motion ) for entry of an order in the form attached hereto as Exhibit A (the Proposed Order ) enforcing the Court s Findings of Fact, Conclusions of Law, and Order Confirming the Seventh Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated February 23, 2012 [D.I. 9759] (the Confirmation Order ). 2 In support of the Motion, JPMC respectfully states as follows PRELIMINARY STATEMENT 1. JPMC requires the assistance of this Court to enforce the terms of the Confirmation Order which became final more than four years ago to prevent holders of Litigation Tracking Warrants ( LTWs ) from attempting to impose liability on JPMC for contractual rights that they had against Washington Mutual, Inc. ( WMI ) and that were extinguished in accordance with the terms of the Debtors confirmed plan of reorganization that went effective in March In violation of the Court s Confirmation Order, certain LTW holders have sued JPMC in federal district court in Ohio seeking to collect from JPMC a portion of the proceeds of the Anchor Litigation, based on a theory that their LTWs entitle them to such a recovery. 2. On the contrary, JPMC s actual interest and Plaintiffs purported interest in the Anchor Litigation are both controlled by the Court s Confirmation Order, the Plan it 2 Capitalized terms not otherwise defined herein are to be given the meanings ascribed to them in the Confirmation Order, the Global Settlement or the Plan, as applicable. The Confirmation Order, the Global Settlement, and the Plan are attached as Exhibit 1, Exhibit 2, and Exhibit 3, respectively, to the Declaration of Brian D. Glueckstein in Support of the Motion of JPMorgan Chase Bank, N.A. for Enforcement of the Findings of Fact, Conclusions of Law, and Order Confirming the Seventh Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code ( Glueckstein Declaration or Glueckstein Decl. ). The Confirmation Order is reported at In re Washington Mutual, Inc., Case No , 2012 WL (Bankr. D. Del. Feb. 24, 2012)

6 Case MFW Doc Filed 05/10/16 Page 6 of 24 confirmed, and the Global Settlement that the Plan incorporates by reference. Those documents demonstrate beyond dispute that the proceeds of the Anchor Litigation are JPMC s, free and clear of any claim by Plaintiffs, and Plaintiffs claim, such as it is, only was an equity interest against WMI. 3. Paragraph 16 of the Confirmation Order states that, pursuant to the Plan and the Global Settlement, the Anchor Litigation was transferred to JPMC free and clear of all Claims and interests pursuant to section 363(f) of the Bankruptcy Code. (Conf. Order 16.) Moreover, the Global Settlement approved in the Confirmation Order expressly provides, for the avoidance of doubt, that JPMC did not assume any liabilities for the LTWs. (Global Settlement 2.13(b).) The Confirmation Order conclusively establishes that Plaintiffs cannot pursue JPMC for claims relating to rights held as owners of LTWs, and that order should be enforced. 4. Plaintiffs Complaint further seeks to ignore the decision of this Court following a trial, and subsequent settlement, of litigation pursued on a class basis to establish the rights of LTW Holders under the terms of the LTW Warrant Agreement. This Court rejected the same theories Plaintiffs now seek to pursue against JPMC, holding that the LTWs created no interest in the Anchor Litigation itself but rather merely represented equity interests in WMI. In re Washington Mutual, Inc., 464 B.R. 656, 660 (Bankr. D. Del. 2012). Plaintiffs cannot avoid and collaterally attack this Court s orders through new litigation in Ohio. Plaintiffs are well aware of the proceedings before this Court and are flouting this Court s orders by pursuing their Complaint elsewhere. The Court should enforce the Confirmation Order and sanction Plaintiffs by ordering them to pay JPMC s reasonable attorneys fees and expenses incurred in defending this improperly filed litigation. -2-

7 Case MFW Doc Filed 05/10/16 Page 7 of 24 RELEVANT BACKGROUND A. The Chapter 11 Cases 5. The long history of the Debtors chapter 11 cases is well-known to the Court and is detailed in the relevant orders. Briefly, in relevant part, on September 26, 2008, each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. Significant disputes quickly arose among WMI, JPMC, and the Federal Deposit Insurance Corporation, both in its corporate capacity ( FDIC-C ) and as receiver ( FDIC-R, together with FDIC-C, the FDIC ) for Washington Mutual Bank ( WMB ) regarding ownership of billions of dollars in Washington Mutual assets. Multiple litigations were commenced in this Court and elsewhere with respect to the disputed assets. B. The Global Settlement Agreement 6. In March 2010, JPMC, the Debtors and the FDIC announced they had reached a settlement regarding the disputed assets that also resolved the proofs of claim filed by JPMC and the FDIC against the Debtors estates. This watershed settlement was set forth in the Global Settlement Agreement, dated February 7, 2011, among JPMC, the Debtors, the FDIC, and certain other parties (the Global Settlement ). 3 The Global Settlement was incorporated into the Debtors plan of reorganization, first presented for confirmation as the Sixth Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, as amended (the Sixth Amended Plan ). The Sixth Amended Plan like each of the Debtors plans of reorganization was premised on the implementation of the Global Settlement. 3 The original global settlement agreement, dated October 6, 2010, was subsequently amended to exclude certain creditors who were parties to the original agreement and make certain other modifications. The economic terms of the settlement remained unchanged. -3-

8 Case MFW Doc Filed 05/10/16 Page 8 of One of the disputed assets was the Anchor Litigation, which then remained pending in the United States Court of Federal Claims. 4 JPMC maintained that it acquired the Anchor Litigation from the FDIC-R pursuant to the failed-bank transaction that occurred on September 25, WMI disputed JPMC s claim to ownership. As a result, the Anchor Litigation was one of the myriad assets subject to litigation before this Court. 8. The Global Settlement, in relevant part, states that JPMC would own the Anchor Litigation. Section 2.13(b) of the Global Settlement provides that pursuant to the 363 Sale and Settlement, JPMC acquired all disputed interests in the Anchor Litigation free and clear of the liens, Claims, interests and encumbrances of any Person, including, without limitation, any liens, Claims, interests and encumbrances of holders of Litigation Tracking Warrants as set forth in the 2003 Amended and Restated Warrant Agreement, dated as of March 11, (Global Settlement 2.13(b) (emphasis added).) The 363 Sale and Settlement implemented the resolution of the disputed assets. These assets are defined as the Plan Contribution Assets and set forth on Exhibit G to the Global Settlement. The Plan Contribution Assets include the Anchor Litigation, which is listed on Exhibit G as being among the assets acquired by JPMC. The 363 Sale and Settlement provided for the sale, transfer and assignment pursuant to the Plan and sections 363 and 365 of the Bankruptcy Code of any and all right, title and interest any of the WMI Entities may have in various assets, including the Anchor Litigation. (Global Settlement 1.2, Definition of 363 Sale and Settlement.) 4 The Anchor Litigation is defined in the Global Settlement and the confirmed Seventh Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code (the Plan ) as [t]hat certain litigation styled Anchor Savings Bank, FSB v. United States, No C, currently pending in the United States Court of Federal Claims, and on appeal in the United States Court of Appeal for the Federal Circuit, as Anchor Savings Bank, FSB v. United States, No , (Global Settlement 1.2; Plan 1.32.) -4-

9 Case MFW Doc Filed 05/10/16 Page 9 of 24 C. Global Settlement Approval and Plan Confirmation 9. In December 2010, the Court held a multi-day trial to consider confirmation of the Sixth Amended Plan and approval of the incorporated Global Settlement. There were numerous filed objections to confirmation and approval of the Global Settlement, including by holders of litigation tracking warrants (collectively, LTW Holders ). See In re Washington Mutual, Inc., 442 B.R. 314, (Bankr. D. Del 2011) ( WMI I ). It is undisputed that any purported rights of LTW Holders arise from the LTW Warrant Agreement entered into by WMI in March Id. at 340; Compl Following trial, the Court issued its WMI I opinion determining that the Global Settlement was the integral foundation of the Sixth Amended Plan, and the transactions contemplated therein, are fair reasonable, and in the best interests of the Debtors creditors and the Debtors chapter 11 estates. (Conf. Order I.) In approving the Global Settlement, the Court specifically addressed issues relating to the LTW Holders, and concluded [b]ecause the claim is disputed, the Debtors may sell the Anchor Litigation free of the clams of the LTW Holders. 11 U.S.C. 363(f)(4). WMI I at 341. The Court went on to find that [b]oth WMI and WMB have arguments that they are the real parties in interest or are the successor to the named plaintiffs in the Anchor Litigation. Id. at The Court identified certain required changes to the Debtors plan and therefore denied confirmation of the Sixth Amended Plan. Id. at 365. Following certain modifications, the Court considered and confirmed the Plan in February The Confirmation Order was issued on February 23,

10 Case MFW Doc Filed 05/10/16 Page 10 of In the Confirmation Order, the Court approved the Global Settlement and its terms as a good faith compromise that is fair and reasonable and in the estates best interests and integral to the Plan, and reaffirmed its prior approval of the terms of the Global Settlement as examined in WMI I. (Conf. Order 3.) The Court s approval of the Global Settlement included the 363 Sale and Settlement. The Confirmation Order contains, in Paragraph 16, an order that the Anchor Litigation, as a Plan Contribution Asset, was transferred to JPMC free and clear of all Claims, liens encumbrances, charges, and other interests of any Entity, with Entity defined to encompass all LTW Holders, including Plaintiffs. (Id. 16; see Plan 1.98.) There were no successful appeals, and the Confirmation Order is a final order. 13. The Plan Effective Date occurred on March 19, 2012, and the transactions set forth in the Global Settlement were consummated on that date. D. Litigation Tracking Warrant Litigation 14. The LTW Holders fully and completely litigated their interests in connection with the Debtors chapter 11 cases. As set out in the Court s Opinion, dated January 3, 2012, certain LTW Holders albeit not Plaintiffs in the Ohio action commenced an adversary proceeding on April 12, 2010, seeking a declaratory judgment relating to the rights of the LTW Holders (the LTW Litigation ). In re Washington Mutual, Inc., 464 B.R. 656, 660 (Bankr. D. Del. 2012) (the LTW Opinion ). Importantly, however, the Court certified the LTW Litigation as a class action on behalf of all LTW Holders. Id. 15. Following a multi-day trial, the Court determined, in relevant part, that (a) the LTWs do not entitle the LTW Holders to any interest in the Anchor Litigation itself, and the Anchor Litigation was therefore property of the estate that could be conveyed by WMI to -6-

11 Case MFW Doc Filed 05/10/16 Page 11 of 24 JPMC as part of the Global Settlement pursuant to section 363 of the Bankruptcy Code, and (b) the Global Settlement was not a sale of substantially all the assets of WMI and thus that the combination provision in Section 4.2(d) of the LTW Warrant Agreement does not apply. Id. at The LTW Holders settled with the Debtors following issuance of the LTW Opinion. 5 The LTW Settlement was approved over the objection of numerous LTW Holders. The LTW Settlement, incorporated into the Plan (see Confirmation Order 36), bound all LTW Holders on a class basis (see LTW Settlement 15). E. Plaintiffs Improper Complaint Filed in Ohio 17. On March 30, 2016, certain purported LTW Holders (the Plaintiffs ) filed a Complaint in the U.S. District Court for the Southern District of Ohio. See Rosenbaum v. JPMorgan Chase Bank, N.A., Case No. 216-cv-281 (D. Ohio) (the Ohio Action ). A copy of the Complaint is attached as Exhibit 4 to the Glueckstein Declaration. 18. The Complaint purports to assert rights of LTW Holders against JPMC for the proceeds of the Anchor Litigation, seeking a declaratory judgment and damages. (Compl. 1.) As in the LTW Litigation, Plaintiffs assert that the LTWs provide them a property interest in the Anchor Litigation that entitles LTW Holders to 85% of the final judgment in that litigation, which was entered in favor of JPMC on September 1, (Id. at 1-2, 24, 25.) Plaintiffs also assert that Section 2.13(b) of the Global Settlement triggered the combination provision in Section 4.2 of the LTW Warrant Agreement. (Id. at 43.) 5 See Order Pursuant to Section 105(A) of the Bankruptcy Code, Bankruptcy Rules 7023 and 9019, and Federal Rule of Civil Procedure 23(E), Approving Stipulation and Agreement Between the Debtors and Class Representatives of the LTW Holders [Adv. D.I. 344] (the LTW Settlement ). A copy of the LTW Settlement is attached as Exhibit 5 to the Glueckstein Declaration. -7-

12 Case MFW Doc Filed 05/10/16 Page 12 of Concurrently with filing this Motion, JPMC is requesting that the Ohio Court stay Plaintiffs litigation there pending adjudication of this Motion. JURISDICTION 20. The Court has subject matter jurisdiction to consider and determine this Motion pursuant to 28 U.S.C. 157(b) and Venue is proper before the Court pursuant to 28 U.S.C and The statutory predicate for the relief requested herein is section 105(a) of the Bankruptcy Code. Bankruptcy courts are empowered to enforce their own orders. Travelers Indem. Co. v. Bailey, 557 U.S. 137 (2009) (affirming that the Bankruptcy Court plainly had jurisdiction to interpret and enforce its own prior orders ). It is well-settled that a bankruptcy court retains jurisdiction to interpret and enforce its prior orders, especially where, as here, the bankruptcy court expressly retains jurisdiction to do so. In re NE Opco, Inc., 513 B.R. 871, 875 (Bankr. D. Del. 2014) (citing cases). 21. In the Confirmation Order, the Court expressly retained exclusive jurisdiction over all matters arising out of, and relating to, the Chapter 11 Cases to the fullest extent legally permissible, including as set forth in the Plan. (Conf. Order 83, AAAA.) The Court specifically retained exclusive subject matter jurisdiction in to the Debtors Plan to (j) hear and determine disputes arising in connection with or relating to the Plan or the Global Settlement Agreement, or the interpretation, implementation, or enforcement of the Plan or the Global Settlement Agreement... [and] (k) to issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any Entity with consummation or enforcement of the Plan or the Global Settlement Agreement

13 Case MFW Doc Filed 05/10/16 Page 13 of 24 (Plan 38.1.) In addition to being the appropriate forum, this is the only court with jurisdiction to consider the Motion. RELIEF REQUESTED 22. By this Motion, JPMC seeks entry of an order (i) enforcing the Court s Confirmation Order, (ii) affirming that the Complaint is precluded by the Confirmation Order, and (iii) awarding sanctions in the form of JPMC s reasonable and documented attorneys fees and expenses resulting from Plaintiffs filing the Complaint with knowledge of the Confirmation Order. BASIS FOR RELIEF REQUESTED I. PLAINTIFFS CLAIMS ARE BARRED BY THE CONFIRMATION ORDER. 23. Plaintiffs Complaint attempts to transform the LTW Holders now extinguished contractual rights against WMI into a claim against JPMC. JPMC does not now have, and has never had, any liability to holders of the LTWs. JPMC is not a party to the LTW Warrant Agreement and never assumed the LTWs or any obligations thereto. Plaintiffs claims asserting that the LTW Holders have a present ownership interest in the Anchor Litigation, and are therefore entitled to 85% of that judgment from JPMC, are barred in their entirety by the Confirmation Order entered by this Court more than four years ago. 24. The operative language is contained in Paragraph 16 of the Confirmation Order, where the Court ordered that, from and after the Effective Date -9-

14 Case MFW Doc Filed 05/10/16 Page 14 of 24 pursuant to sections 363, 1123, and 1141(c) of the Bankruptcy Code, the Plan Contribution Assets to be transferred to the JPMC Entities and the FDIC Receiver, respectively, pursuant to the Global Settlement Agreement shall be transferred to such Entities, free and clear of all Claims, liens, encumbrances, charges, and other interests of any Entity,[ 6 ] including, but not limited to, creditors and equity security holders of the Debtors, except for any claim that is an Allowed JPMC Assumed Liability Claim. 7 (Conf. Order 16 (emphasis added).) There is no dispute that any rights the LTW Holders might have arise out of the Amended and Restated Warrant Agreement entered into by WMI. LTW Opinion, 464 B.R. at 659; Compl The transfer of WMI s purported interest in the Anchor Litigation pursuant to section 363 of the Bankruptcy Code precludes any claims against JPMC with respect to any Claims or interests of the LTW Holders relating to the Anchor Litigation. By its terms 363(f) cleanses the transferred assets of any attendant liabilities and allows the buyer to acquire them without fear that an estate creditor can enforce its claim against those assets. In re NE Opco, Inc., 513 B.R. at 866 (quoting In re Grumman Olson Indus., Inc., 445 B.R. 243, 249 (Bankr. S.D.N.Y. 2011); see In re Trans World Airlines, Inc., 322 F.3d 283, 290 (3d Cir. 2009) (adopting expansive reading of interests in property under 363(f) to include claims that arise from the property being sold). Plaintiffs Complaint seeks to do exactly what the statute precludes impose attendant liability upon JPMC with respect to the transferred Anchor Litigation. 6 7 Entity as defined in 1.98 of the Plan includes all individuals, including Plaintiffs. Plaintiffs attempt to misconstrue the definition of JPMC Assumed Liabilities under the Plan as JPMC having assumed all liabilities of WMI. (Compl. 40.) JPMC did nothing of the sort. In fact the plain language of the definition limits any assumed liabilities to those expressly assumed under the terms of the Global Settlement. (Plan ) -10-

15 Case MFW Doc Filed 05/10/16 Page 15 of The Confirmation Order, and the free and clear language in Paragraph 16 therein, was the culmination of an extensive record before this Court. In confirming the Plan, the Court approve[d] the Global Settlement Agreement as a good faith compromise that is fair and reasonable and in the estates bests interests and integral to the Plan, and reaffirmed its prior approval of the terms of the Global Settlement. (Conf. Order 3.) See WMI I, 442 B.R. at Certain LTW Holders objected to the approval of the Global Settlement and the proposed treatment of the Anchor Litigation in the Global Settlement. The Court carefully examined these issues in its opinion. 28. The Court noted that, [u]nder the Global Settlement, JPMC control[s] and [is] entitled to all proceeds from the Anchor Litigation. This will be free of the interests that the LTW Holders have, if any, in the Anchor Litigation. WMI I, 442 B.R. at 340 (emphasis added). This resulted from the 363 Sale and Settlement set forth in the Global Settlement that implemented the resolution of the multitude of disputed asset ownership claims. As the Court recognized, the Global Settlement was the integral foundation of the Debtors Plan. (Conf. Order I.) In fact, the consideration provided through the Global Settlement was the source of creditor recoveries in these cases. 29. The assets included in the 363 Sale and Settlement are defined therein and set forth as Plan Contribution Assets on Exhibit G to the Global Settlement. (Global Settlement 1.2, Ex. G.) The Plan Contribution Assets expressly include the Anchor Litigation as being among the assets acquired by JPMC. (Id.) -11-

16 Case MFW Doc Filed 05/10/16 Page 16 of The 363 Sale and Settlement involved the sale, transfer and assignment pursuant to the Plan and sections 363 and 365 of the Bankruptcy Code of any and all right, title and interest any of the WMI Entities may have in various assets, including the Anchor Litigation. (Global Settlement 1.2, Definition of 363 Sale and Settlement.) As Plaintiffs are aware (see Compl. 39), Section 2.13(b) of the Global Settlement unequivocally dictates that pursuant to the 363 Sale and Settlement, JPMC acquired all disputed interests in the Anchor Litigation on the following terms free and clear of the liens, Claims, interests and encumbrances of any Person, including, without limitation, any liens, Claims, interests and encumbrances of holders of Litigation Tracking Warrants as set forth in the 2003 Amended and Restated Warrant Agreement, dated as of March 11, (Global Settlement 2.13(b) (emphasis added).) 31. Certain parties objected to the sale of the Anchor Litigation to JPMC pursuant to section 363(f) of the Bankruptcy Code. The Court overruled those objections, concluding that [b]ecause the claim is disputed, the Debtors may sell the Anchor Litigation free of the claims of the LTW Holders pursuant to section 363(f)(4). WMI I, 442 B.R. at 341. While JPMC asserted that the Anchor Litigation was owned by WMB and thus acquired from the FDIC-R, WMI argued that it owned the Anchor Litigation. The Court found that there [was] a legitimate question as to who owns the [Anchor Litigation]. Both WMI and WMB have arguments that they are the real parties in interest or are the successor to the named plaintiffs. Id. at 342. As a result of that dispute, the Court determined that the requirements for a free and clear transfer pursuant to section 363(f)(4) of the Bankruptcy Code were satisfied, and authorized the sale of the Anchor Litigation to JPMC free and clear of all Claims and interests. Id. No appeals of the Court s decision were pursued by LTW Holders. The Court at the time -12-

17 Case MFW Doc Filed 05/10/16 Page 17 of 24 had not yet decided the LTW Litigation, so the Court required the Debtors to maintain a $347 million reserve to adequately protect LTW Holders following the sale in the event that they later established valid claims against WMI. Id at 341. It was never contemplated that any interests of the LTW Holders would be recoverable against JPMC. 32. As such, there can be no dispute that JPMC acquired the Anchor Litigation free and clear of any purported claims of the LTW Holders. Any claims of the LTW Holders, if any, were claims against the WMI bankruptcy estate and cannot now be transformed into claims against JPMC. 33. The references in Plaintiffs Complaint to their refusal to grant JPMC a third-party release under Section 41.6 of the Plan (Compl ) miss the point and are wholly irrelevant here. Plaintiffs confuse a general release of JPMC with the result that Section 363(f) imposes by operation of law. All claims asserted in the Complaint relate to Plaintiffs rights as purported LTW Holders and therefore are precluded by the Confirmation Order irrespective of whether Plaintiffs chose to provide a general release. II. THE COMPLAINT IS AN IMPROPER COLLATERAL ATTACK ON THE CONFIRMATION ORDER AND THE GLOBAL SETTLEMENT. 34. Plaintiffs Complaint attacks the Global Settlement, making baseless allegations that JPMC craft[ed] what purported to be a Global Settlement to eviscerate the Litigation Tracking Warrant holders vested claims through the inclusion of Section 2.13(b). (Compl. 38.) Plaintiffs rely on these flights of fancy to assert claims for civil conspiracy (Compl. 74) and tortious interference with contract (Compl. 60), among others. The Complaint is a blatant and impermissible collateral attack on the Confirmation Order and the Global Settlement. Plaintiffs never pursued available remedies in these proceedings, including -13-

18 Case MFW Doc Filed 05/10/16 Page 18 of 24 objecting to Plan confirmation and pursuing an appeal of the Confirmation Order. Nor did Plaintiffs ever seek timely reconsideration or relief under Fed. R. Civ. P. 60(b). 35. As the Supreme Court of the United States has cautioned, [i]t is for the court of first instance to determine the question of the validity of the law, and until its decision is reversed for error by orderly review, either by itself or by a higher court, its orders based on its decision are to be respected. Celotex Corp. v. Edwards, 514 U.S. 300, 313 (1995) (citation omitted). The free and clear transfer of the Anchor Litigation and approval of the terms of the Global Settlement were conclusively determined in the Confirmation Order more than four years ago. The confirmation of the Plan is binding and cannot now be collaterally attacked. In re Worldwide Direct, Inc., 334 B.R. 112, 129 (Bankr. D. Del. 2005) (Walrath J.); Travelers Indemnity Co. v. Bailey, 557 U.S. 137 (2009) (holding that a bankruptcy court order was impervious to collateral attack for any reason, including lack of subject matter jurisdiction); see also 11 U.S.C After having failed to pursue an objection and appeal, or any other remedy, Plaintiffs are not permitted to challenge the final Confirmation Order now. 36. As purported LTW Holders, Plaintiffs could themselves have objected in connection with Plan confirmation to approval of the Global Settlement or of the free and clear sale to JPMC of the disputed Anchor Litigation. 8 No Plaintiff did so. Instead, Plaintiffs years later seek impermissibly to circumvent the Confirmation Order by filing their Complaint away 8 The Court approved the Plan confirmation hearing notice and notice procedures in its Order (I) Approving the Proposed Disclosure Statement and the Form and Manner of the Notice of the Proposed Disclosure Statement Hearing, (II) Establishing Solicitation and Voting Procedures, (III) Scheduling a Confirmation Hearing, and (IV) Establishing Notice and Objection Procedures for Confirmation of the Debtors Seventh Amended Plan [D.I. 9414] (the Procedures Order ). Pursuant to the Procedures Order, the Debtors provided notice and solicitation packages for each beneficial LTW Holder to each voting nominee for distribution. (Procedures Order 41.) See Affidavit of Service of David M. Sharp, dated February 1, 2012 [D.I. 9551] at p

19 Case MFW Doc Filed 05/10/16 Page 19 of 24 from this Court, in Ohio. Yet Plaintiffs grievances with respect to the Global Settlement are foreclosed by this Court s decision. See, e.g., In re Szostek, 886 F.2d 1405, 1406 (3d Cir. 1989) (declining to reverse confirmation of chapter 13 plan when appellant failed to object to confirmation order). As Plaintiffs purport to be LTW Holders and therefore creditors of WMI, Section 1141(a) of the Bankruptcy Code further eliminates any argument that the Confirmation Order is somehow not binding on them. See 11 U.S.C. 1141(a) (providing that confirmed plan binds all creditors and equity security holders, whether or not such creditor or equity security holder has accepted the plan). The Complaint must be withdrawn. III. THIS COURT HAS CONCLUSIVELY DETERMINED THAT THE LTW HOLDERS HAVE NO INTEREST IN THE ANCHOR LITIGATION ITSELF. 37. Plaintiffs claims fail for the additional reason that this Court already conclusively determined on a class basis the rights of LTW Holders and rejected the substantive arguments being advanced by Plaintiffs. Plaintiffs were members of the certified class in the LTW Litigation that litigated, lost, and then settled the arguments they now purport to assert against JPMC. 38. Issue preclusion prevents parties from relitigating an issue that has already been actually litigated. Peloro v. U.S., 488 F.3d 163 (3d Cir. 2007). The entire premise of Plaintiffs Complaint is that the LTW Holders have a vested property interest in the Anchor Litigation and are entitled to receive 85% of the Anchor Litigation judgment. (Compl. 1, 25, 41.) The Complaint also attempts to rely on Section 2.13(b) of the Global Settlement to argue that Section 4.2 of the Warrant Agreement was triggered. (Id. 43.) The rights of LTW Holders, including both of these issues, were exhaustively addressed by class counsel on behalf of the LTW Holders. The Court conducted a multi-day trial at which fact witnesses, including -15-

20 Case MFW Doc Filed 05/10/16 Page 20 of 24 the drafters of the LTWs, and expert witnesses testified, and the Court received hundreds of pages of briefing. See LTW Opinion, 464 B.R that 39. On a complete record, the Court issued the LTW Opinion and concluded LTWs do not entitle the LTW Holders to an interest in the Anchor Litigation itself. They are only entitled to the issuance of common stock in WMI. Therefore, the Court concludes that the Anchor Litigation itself is property of the estate and may be conveyed by WMI to JPMC as part of the [Global Settlement] pursuant to section 363 of the Bankruptcy Code. LTW Opinion, 464 B.R. at 671. In its LTW Opinion, the Court made factual findings, including that the drafters of the LTWs confirmed the intent of the LTWs was to convey to the shareholders only a right to receive stock, not cash. Id. at The Court also determined that Section 4.2 of the Warrant Agreement its combination provision is inapplicable because the Global Settlement is not a sale of substantially all the assets of WMI. Id. at As members of the certified class, Plaintiffs had a full and fair opportunity to litigate these issues in the LTW Litigation. Therefore, the fact that the litigation was against WMI and not JPMC is of no moment. Plaintiffs are estopped from advancing the arguments they already lost in the LTW Litigation. Peloro, 488 F.3d at The parties to the LTW Litigation subsequently settled the litigation, and the terms of that settlement were approved by this Court over the objection of certain LTW Holders who wanted to pursue in another forum the same arguments that they had a beneficial 9 Moreover, Plaintiffs claims concerning the obligations JPMC incurred pursuant to the Global Settlement or the Plan fall within this Court s exclusive jurisdiction. (Plan 38.1(j).) -16-

21 Case MFW Doc Filed 05/10/16 Page 21 of 24 interest in the Anchor Litigation itself. (See Feb. 1, 2012 Hr g Tr. at ) 10 In overruling those objectors continuing assertions of interests in the Anchor Litigation, the Court reiterated to an objecting LTW Holder But you did lose... You did not own eighty-five percent of the Anchor Litigation. You were entitled, if the litigation succeeded, to issuance of common stock with a value at that time equal to eighty-five percent of the settlement... I have decided that issue. (Feb. 1, 2012 Hr g Tr. at ) The LTW Settlement is binding on the entire class of LTW Holders (see LTW Settlement 15) and incorporated into the Plan (Conf. Order 36) In approving the LTW Settlement, the Court did go on to note that LTW Holders retained the right to refuse to give a third-party release to JPMC and that approval of the LTW Settlement itself did not affect any rights that the LTW holders may have against JPMC. (Feb. 1, 2012 Hr g Tr. at ) But, as discussed above, Plaintiffs are not asserting rights they may have against JPMC; they are asserting rights they may have had against WMI that they claim followed the Anchor Litigation. The Confirmation Order did affect those rights, and in any event, retaining claims generally against JPMC did not license LTW Holders to end-run this Court s orders and commence new litigation addressing the very same issues already decided. See Brown v. Wells Fargo Bank, N.A., 25 F. Supp. 3d 144, 148 (D.D.C. 2014) (noting that [u]nder the doctrine of res judicata, once a claim is litigated and that litigation results in a final A copy of the hearing transcript from proceedings before this Court on February 1, 2012 is attached as Exhibit 6 to the Glueckstein Declaration. One LTW Holder unsuccessfully sought to appeal the Court s LTW Opinion, while none appealed the LTW Settlement. See Bush v. Washington Mutual, Inc., C.A. No (GMS) (D. Del.), Memorandum, dated Feb. 2, 2015 [Adv. Pro. D.I. 379] (granting WMI s motion to dismiss appeal and noting that Appellant was a member of the certified class of LTW Holders). -17-

22 Case MFW Doc Filed 05/10/16 Page 22 of 24 decision on the merits, be... by trial, or by a settlement between the parties resulting in a final judgment, the issue is decided permanently ). In short, Plaintiffs Complaint is barred by this Court s prior orders. IV. JPMC SHOULD BE AWARDED ITS ATTORNEYS FEES AND EXPENSES. 43. Plaintiffs are willfully responsible for JPMC incurring unnecessary fees and expenses in having to respond to the improper Complaint filed in Ohio and to file this Motion to enforce the Court s valid orders. As a result, JPMC respectfully requests that the Court impose sanctions for civil contempt and direct Plaintiffs to pay JPMC s reasonable and documented attorneys fees and expenses relating to this matter. 44. To obtain sanctions for civil contempt, three elements must be established (a) a valid order of the court must exist; (b) the person violating the order must have actual knowledge of the order; and (c) the person must have disobeyed the order. In re Continental Airlines, Inc., 236 B.R. 318, (Bankr. D. Del. 1999) (Walrath J.) (holding creditor in contempt of the confirmation order and directing payment of attorneys fees and costs incurred). 45. Plaintiffs knowing disobeyence of this Court s Confirmation Order warrants sanctions for civil contempt here. Plaintiffs Complaint is replete with statements that establish that they were well aware of the Confirmation Order, the LTW Litigation, and LTW Settlement, but nonetheless went ahead and filed their Complaint. For example, the Complaint discusses at length Section 2.13(b) of the Global Settlement and the language providing that JPMC acquired the Anchor Litigation free and clear of all interests (Compl. 39); notes that the Global Settlement went effective in 2012 as part of the disposition of the bankruptcy (Compl. 38); and discusses the LTW Litigation and the fact it proceeded as a certified class (Compl. -18-

23 Case MFW Doc Filed 05/10/16 Page 23 of 24 36). Furthermore, on May 2, 2016, counsel for JPMC wrote to Plaintiffs counsel explaining the facts as set forth in this Motion and demanding that the Complaint be withdrawn without the need for motion practice. Plaintiffs refused to do so. Under the circumstances, sanctions are warranted and should be imposed, among other reasons, to deter these or other LTW Holders from filing similar actions in the future. NOTICE 46. Notice of the Motion has been provided to (a) Plaintiffs in the Ohio Action, (b) the WMI Liquidating Trust, (c) the U.S. Trustee, and (c) all other persons entitled to receive notice pursuant to this Court s Order Authorizing WMI Liquidating Trust to Remove Parties from Rule 2002 List [D.I ], dated January 7, In light of the nature of the relief requested, JPMC submits that no other or further notice need be provided. WHEREFORE, for the reasons set forth herein, JPMC respectfully requests that the Court (a) enter an order, substantially in the form attached hereto as Exhibit A and (b) grant such other and further relief as is just and proper. -19-

24 Case MFW Doc Filed 05/10/16 Page 24 of 24 Dated May 10, 2016 Wilmington, Delaware Respectfully submitted, /s/ Matthew B. McGuire Adam G. Landis (I.D. 3407) Matthew B. McGuire (I.D. 4366) LANDIS RATH & COBB LLP 919 Market Street Suite 1800 Wilmington, DE Tel (302) Fax (302) and Robert A. Sacks Brent J. McIntosh Brian D. Glueckstein SULLIVAN & CROMWELL LLP 125 Broad Street New York, New York Tel (212) Fax (212) Counsel for JPMorgan Chase Bank, N.A. -20-

25 Case MFW Doc Filed 05/10/16 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re WASHINGTON MUTUAL, INC., et al., 1 Debtors. Chapter 11 Case No (MFW) Jointly Administered Hearing Date June 2, 2016 at 1030 a.m. (ET) Obj. Deadline May 24, 2016 at 400 p.m. (ET) NOTICE OF MOTION AND HEARING PLEASE TAKE NOTICE that on May 10, 2016, JPMorgan Chase Bank, N.A. ( JPMC ) filed the Motion of JPMorgan Chase Bank, N.A. for Enforcement of the Findings of Fact, Conclusions of Law, and Order Confirming the Seventh Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code (the Motion ) with the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ). PLEASE TAKE FURTHER NOTICE that any objections or responses to the Motion must be filed in writing with the Clerk of the Bankruptcy Court, 824 North Market Street, 3 rd Floor, Wilmington, Delaware 19801, and served upon and received by the undersigned counsel for JPMC on or before May 24, 2016 at 400 p.m. (prevailing Eastern Time). PLEASE TAKE FURTHER NOTICE that, in the event that one or more objections or responses to the Motion are timely filed and not otherwise resolved, the Motion 1 The Debtors in these chapter 11 cases and the last four digits of each Debtor s federal tax identification number are (a) Washington Mutual, Inc. (3725); and (b) WMI Investment Corp. (5395). The principal offices of WMI Liquidating Trust, as successor in interest to the Debtors, are located at 1201 Third Avenue, Suite 3000, Seattle, Washington

26 Case MFW Doc Filed 05/10/16 Page 2 of 2 will be considered at a hearing before The Honorable Mary F. Walrath at the Bankruptcy Court, 824 North Market Street, 5 th Floor, Courtroom 4, Wilmington, Delaware 19801, on June 2, 2016 at 1030 a.m. (prevailing Eastern Time). PLEASE TAKE FURTHER NOTICE THAT IF NO OBJECTIONS OR RESPONSES TO THE MOTION ARE TIMELY FILED, SERVED AND RECEIVED IN ACCORDANCE WITH THIS NOTICE, THE BANKRUPTCY COURT MAY GRANT THE RELIEF REQUESTED IN THE MOTION WITHOUT FURTHER NOTICE OR HEARING. Dated May 10, 2016 Wilmington, Delaware Respectfully submitted, /s/ Matthew B. McGuire Adam G. Landis (I.D. 3407) Matthew B. McGuire (I.D. 4366) LANDIS RATH & COBB LLP 919 Market Street Suite 1800 Wilmington, DE Tel (302) Fax (302) and Robert A. Sacks Brent J. McIntosh Brian D. Glueckstein SULLIVAN & CROMWELL LLP 125 Broad Street New York, New York Tel (212) Fax (212) Counsel for JPMorgan Chase Bank, N.A. -2-

27 Case MFW Doc Filed 05/10/16 Page 1 of 3 EXHIBIT A Proposed Order

28 Case MFW Doc Filed 05/10/16 Page 2 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re WASHINGTON MUTUAL, INC., et al., 1 Debtors. Chapter 11 Case No (MFW) Jointly Administered Re D.I. ORDER ENFORCING THE COURT S FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER CONFIRMING THE SEVENTH AMENDED JOINT PLAN OF AFFILIATED DEBTORS PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE Upon the motion (the Motion ) 2 of JPMorgan Chase Bank, N.A. ( JPMC ) for an order (this Order ) enforcing this Court s Findings of Fact, Conclusions of Law, and Order Confirming the Seventh Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated February 23, 2012 [D.I. 9759] (the Confirmation Order ); this Court having jurisdiction to consider the Motion pursuant to 28 U.S.C. 157 and 1334; and this Court having retained jurisdiction to consider the Motion pursuant to paragraph 83 of the Confirmation Order and Article XXXVIII of the Plan; and venue of these chapter 11 cases and the Motion being proper before this Court pursuant to 28 U.S.C and 1409; and this matter being a core proceeding pursuant to 28 U.S.C. 157(b); and due and proper notice of the 1 2 The Debtors in these chapter 11 cases and the last four digits of each Debtor s federal tax identification number are (a) Washington Mutual, Inc. (3725); and (b) WMI Investment Corp. (5395). The principal offices of WMI Liquidating Trust, as successor in interest to the Debtors, are located at 1201 Third Avenue, Suite 3000, Seattle, Washington Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.

29 Case MFW Doc Filed 05/10/16 Page 3 of 3 Motion having been provided to those parties identified therein, and no other or further notice being required; and the Court having determined that the relief sought in the Motion is in the best interest of WMI Liquidating Trust and all parties in interest; and objections (if any) to the Motion having been withdrawn or overruled on the merits; and the Court having determined that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and after due deliberation and sufficient cause appearing therefore; IT IS HEREBY ORDERED THAT 1. The Motion is GRANTED as set forth herein. 2. The Confirmation Order included the transfer to JPMC of the Anchor Litigation free and clear of any liens, Claims, interests and encumbrances of holders of Litigation Tracking Warrants ( LTWs ) pursuant to section 363(f) of the Bankruptcy Code. 3. The Confirmation Order precludes assertion of claims against JPMC concerning, relating to, or arising from purported rights as LTW Holders. 4. Plaintiffs Complaint and the claims asserted therein are barred by the Confirmation Order. 5. Plaintiffs are directed to pay JPMC s reasonable and documented attorneys fees and expenses resulting from defending the Complaint and pursuing this Motion. 6. This Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation, interpretation or enforcement of this Order. Dated June, 2016 Wilmington, Delaware Mary F. Walrath United States Bankruptcy Judge -2-