$208.5M proposed settlement in WaMu suit

July 4, 2011 at 12:00a.m.

Seattle Times

SEATTLE

A nickel a share.

That’s how much Washington Mutual shareholders could receive, on average, as part of a $208.5 million proposed settlement in the lawsuit brought by a group of pension plans, investment funds and individual investors against the failed lender’s former top executives, directors and others.

According to papers made public Friday in federal court in Seattle, the executives and directors — a group that includes former Chief Executive Kerry Killinger — will pay $105 million, but the money will come from Washington Mutual’s insurance company, not the executives’ pockets. A group of 14 securities firms will pay $85 million, and accounting firm Deloitte & Touche will pay $18.5 million.

It would be the largest federal securities class-action settlement ever in western Washington, according to the lead plaintiffs’ attorneys. It also would be one of the largest class-action settlements resulting from the financial crisis, trailing a $624 million settlement by Countrywide Financial and its accountant, KPMG, and $475 million by Merrill Lynch.

But it pales against the estimated 1.43 billion shares of Washington Mutual common stock, 10.2 million shares of Washington Mutual preferred and millions of dollars’ worth of notes and other securities that would be covered by the settlement.