8-KOther Events

JPMORGAN CHASE & CO 8-K Report, Corporate Update (Aug 19, 2016)

Filed August 19, 2016For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

This 8-K filing from JPMorgan Chase & Co. (JPM) on August 19, 2016, announces the execution of definitive agreements to resolve significant outstanding disputes with Deutsche Bank National Trust Company (DBNTC) and the Federal Deposit Insurance Corporation (FDIC) concerning liabilities stemming from the 2008 acquisition of Washington Mutual Bank (WMB). The resolution involves JPMorgan Chase Bank, N.A. receiving a cash payment of $645 million from the WMB receivership estate. This settlement effectively closes multiple legal actions, including litigation brought by DBNTC against the FDIC and JPMorgan Chase, as well as JPMorgan Chase's own indemnification claims related to the WMB transaction. The agreement also sees JPMorgan Chase releasing its indemnity claims against the WMB receivership estate, which were valued at over $1 billion.

Key Highlights

  • 1JPMorgan Chase & Co. has finalized agreements to resolve disputes with DBNTC and the FDIC related to the 2008 Washington Mutual Bank (WMB) acquisition.
  • 2The company will receive a cash payment of $645 million from the WMB receivership estate.
  • 3The settlement resolves pending litigation brought by DBNTC against the FDIC and JPMorgan Chase concerning mortgage securitization representations and warranties.
  • 4JPMorgan Chase is releasing its outstanding indemnification claims against the WMB receivership estate, which exceeded $1 billion.
  • 5The agreements will lead to the dismissal of four WMB-related legal actions in the U.S. District Court for the District of Columbia.
  • 6The pre-tax impact to JPMorgan Chase is the recognized cash payment in the future period it is accounted for.

Frequently Asked Questions

The primary purpose of this filing is to announce that JPMorgan Chase Bank, N.A. has executed definitive agreements to resolve outstanding legal disputes with Deutsche Bank National Trust Company (DBNTC) and the Federal Deposit Insurance Corporation (FDIC) concerning liabilities arising from the 2008 acquisition of Washington Mutual Bank (WMB).

JPMorgan Chase Bank, N.A. will receive a cash payment of $645 million from the WMB receivership estate. This settlement resolves significant claims and counterclaims, and the pre-tax income recognized will be equal to the cash payment in the future period it is accounted for.

The settlement resolves litigation brought by DBNTC against the FDIC and JPMorgan Chase regarding alleged breaches of representations and warranties in mortgage securitization agreements tied to WMB. It also resolves JPMorgan Chase's indemnification claims against the WMB receivership estate related to the 2008 acquisition.

No, under the terms of the settlement, JPMorgan Chase Bank, N.A. is releasing its substantial indemnity and other claims against the WMB receivership estate (valued at over $1 billion) and, in return, will be paid $645 million in cash. The FDIC-Receiver will also provide DBNTC an allowed claim.