SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) April 30, 2002
WASHINGTON MUTUAL, INC.
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(Exact name of registrant as specified in its charter)
Washington 1-14667 91-1653725
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
Registrant's telephone number, including area code: (206) 461-2000
Item 5. Other Events.
In January 1995, Anchor Savings Bank FSB ("Anchor FSB"), filed suit against
the U.S. Government in the United States Court of Federal Claims for unspecified
damages involving supervisory goodwill related to its acquisition of eight
troubled savings institutions from 1982-1985. The Dime Savings Bank of New York,
FSB ("Dime FSB") acquired Anchor FSB shortly after the case was brought and Dime
FSB was subsequently merged into Washington Mutual Bank, F.A. ("WMBFA") in
January 2002.
Anchor FSB's lawsuit alleges breach of contract and taking of property
without compensation by the U.S. Government in connection with its contracts
with the government related to the acquisition of the eight failing federally
insured savings and loan institutions. Four of the institutions were acquired
with some direct financial assistance from the Federal Savings and Loan
Insurance Corporation ("FSLIC"), a U.S. Government agency that had provided
deposit insurance to savings and loans ("assisted mergers"), and four were
acquired without direct financial assistance from the FSLIC ("unassisted
mergers.") At the time of the alleged breach when the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 was enacted, approximately $518
million of the supervisory goodwill that was created in connection with these
eight acquisitions still remained on Anchor FSB's books. Approximately $450
million of the remaining supervisory goodwill was derived from the four assisted
mergers and approximately $68 million was derived from the four unassisted
mergers. This supervisory goodwill remaining on Anchor FSB's books at the time
of the alleged breach forms the principal basis for Anchor FSB's damage claims.
In 1997, Dime FSB moved for partial summary judgment as to the existence of
a contract and the U.S. Government's breach of that contract in each of the
related transactions. The U.S. Government disputed the existence of a contract
in each of these transactions, cross-moved for summary judgment and submitted a
filing acknowledging that it was not aware of any affirmative defenses. In
August 1997, the Claims Court held a hearing on summary judgment motions in four
other related cases and ruled in favor of the plaintiffs on all "common" issues.
From April 1998 through July 1999, Dime FSB conducted discovery. In September
1999, the U.S. Government filed supplemental papers in support of its pending
summary judgment motion. Dime FSB responded to such filings in early November
1999, at which time it again requested entry of summary judgment on liability in
its favor.
In October 1999 and December 2001, Dime FSB filed expert reports claiming
damages under three alternative theories. Dime FSB sought lost profits in the
amount of $980 million, restitution damages in the amount of $681 million, and
reliance damages in the amount of $446 million. The U.S. Government had
previously filed expert reports denying the existence of damages under any of
these theories.
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In December 2000, Dime Bancorp, Inc., Dime FSB's parent, distributed
Litigation Tracking Warrants(TM) to its shareholders, which represent the right
to purchase Common Stock equal in value to 85% of the net after-tax proceeds, if
any, from this lawsuit. The warrants are listed on the NASDAQ National Market
under the trading symbol "DIMEZ."
In March, 2001, the Court heard oral argument on the pending summary
judgment motions in the case with respect to three of the eight institutions
acquired by Anchor FSB: the assisted merger of Anchor FSB with Peachtree Federal
Savings and Loan Association and Federal Savings and Loan Association of Crisp
County, Georgia in 1982 (the "Peachtree/Crisp transaction"); and the unassisted
merger of Anchor FSB with Standard Federal Savings and Loan Association in 1983
(the "Standard Federal transaction.").
On April 30, 2002, the Claims Court issued an order (1) granting Dime FSB's
motion for partial summary judgment, denying the U.S. Government's cross-motion,
and finding that it breached its contract and is liable for damages with respect
to the Peachtree/Crisp transaction; and (2) granting summary judgment to the
U.S. Government, denying Dime FSB's motion for summary judgment, and finding
that no contractual relationship existed between the U.S. Government and Anchor
FSB with respect to the Standard Federal transaction. Approximately $28.5
million of supervisory goodwill derived from the Peachtree/Crisp transaction,
and approximately $26.7 million of supervisory goodwill derived from the
Standard Federal transaction, remained on Anchor FSB's books at the time of the
alleged breaches by the U.S. Government in 1989.
The Claims Court also directed the parties to file a joint status report by
May 24, 2002, with recommendations for procedures to resolve the pending summary
judgment motions with respect to the remaining five merger transactions and
damages issues related to the Peachtree/Crisp transaction.
The Company is reviewing the Claims Court's order. It is not possible at
this time to determine whether or not appeals will be taken from the order by
either party, whether the Claims Court will grant or deny any of Dime FSB's
remaining motions for partial summary judgment, or when it will schedule a trial
on damages and any remaining liability issues.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
WASHINGTON MUTUAL, INC.
By: /s/ Fay L. Chapman
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Fay L. Chapman
Senior Executive Vice President
Date: May 2, 2002
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