William Duke Objection 4-28-2011

8/6/2019 William Duke Objection 4-28-2011

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United States Bankruptcy CourtFor the District of Delaware

In re: Washington Mutual Inc., et.al. Debtors

The Honorable Judge Mary WalrathUnited States Bankruptcy CourtDistrict of Delaware824 market Street, 5th FloorWilmington, De. 19801

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Apri[21,20'i!-, ," 0co

Chapter 11Case No. 08-12229(MFW)

Objection of William Duke to the Debtors Modif ied Sixth Amended Joint Plan of Affiliated DebtorsPursuant to Chapter 11 of the United States Bankruptcy Code.

Docket #7215 Date Filed: 4/28/2011


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"An objection to confirmation is governed by Rule 9014 and "shall be filed and served on theDebtor, the trustee, the proponent of the plan, and any committee appointed under the Codeand any other entity designated by the Court, within a time fixed by the Court." FED.R.BANKR.P(b)(1).

''The Court shall rule on confi rmation of the plan after notice and hearing as provided in Rule2002. If no objection is filed, the Court may determine that the plan has been proposed in goodfaith and not by any means forbidden by law without receiving evidence on suchissues."FED.R.BANKR.P 3020(b)(2). However the Court has an independent duty to determinewhether a plan complies with the appropriate sections of the Bankruptcy Code even if noobjection is filed. In reo Genesis Health Ventures, Inc.266B.R. 591(Bankr.D.DeI.2001)

Relevant Substantive LawThe Court may confirm a plan under Chapter 11 each of the thirteen enumeratedRequirements of 11 U.S.C. 1129(a) are met .

ObiectionsBackground:


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Releases

Section 43.6 of the plan ,Releases by Holders of Claims, states in part "and provided, further, thatnotwithstanding anything contained in this Section 43.6(a) to the contrary, the foregoing release shallnot extend to acts of gross negligence or willful misconduct by any of the released parties (other thanwith respect to JPMC Entities and their respective Related Persons): and provided, fur ther, thatnotwithstanding the foregoing solely for purposes of this Section 43.6(a) "Released Parties" shall notinclude Related Persons other than (i) Related Persons of the JPMC Entities and (ii) related Persons ofthe FDIC Receiver and FDIC Corporate."Notwithstanding the laudable effort by the framers of this plan to allow FDIC Receiver and FDICCorporate Entities and Primary Persons to undergo scrut iny and possible sanctions for any grossnegligence or willful misconduct I object to the exclusion of JPMC Entities, JPMC Related Persons, andFDIC Receiver and Corporate Related Persons."Bankruptcy shall not be a safe haven for criminals." (HR. Rep No 595, 95TH Congo 2nd sess.342,1978 U.S.Congo & ADMIN NEWS 5963, 6299)Section 524(a)(20 provides guidelines in evaluating debtors pleas for injunctive relief from state criminalprosecution. JPMC and FDIC Entities and Related persons are no t debtors but the tenet above is broadenough to include Third Parties. William and Mary Law Revue (Vol. 29:579 page 588) under the sectionThe Principal Motivation Test, notes; ''The federal bankruptcy court wil l not usually interfere with thestate criminal process when the criminal prosecution has been instituted primarily to vindicate the rightsof the public by punishing criminal conduct or to discourage such conduct by others."Matters anchored in gross negligence or willful misconduct might very well originate in states' courts.


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Testimony before this Court during the previous confirmation hearings indicate that disagreement aboutthe location of the BOll Fund exists between the Debtors and their attorneys. Mr. Kosturos, chiefrestructuring officer, stated that the BOll Fund had been transferred to JPMC (attachment B, testimonyof Kosturos from confirmation hearing 12/02/2010 page 382:8-25, page 383: 1-9).response to attorneyflQ: All of these on this board are disputed assets, correct'?A: I disagree.Q: You have not asserted any litigation, every single one of these assets as being owned by the estate?A: Well at some point we did. But let's take BOll/COLI, for instance. The BOll/COLI $5 bi llion we wentthrough a line-by-line analysis of that, and it is--it has been determined, at least fo r WMI, that we don'town the $5billion. We potentia lly had some claims there but JPM has to my knowledge probablyliquidated those already. So, you know, we--we have potential claims there.Q: I'm sorry. Those have already been transferred and have been liquidated by JP Morgan?A: They were never under our control.Q: You disputed these assets and JP Morgan has liquidated them; is that right?A: I don't know. I'm sorry, I may have misspoken. I don't know what JP Morgan has done with those.But those assets are not owned by WMI. Those assets were on the balance sheet of WMB."


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Per the current proposed plan of reorganization JPMC is to receive, after a series of convoluted buyingand selling with the Debtor, Bank Owned Life Insurance policies which cover employees of the formerWAMU banks and other subsidiaries that were obtained by JPMC. A reasonable solution, perhaps, ifconducted at Cash Surrender Value and pertaining to the former WAMU et al. employees who managedto keep their positions after the WAMU takeover.What has happened as indicated by the FR Y 9C's referred to above (copies of which are attached to thisobjection-see attachment B*) is that no t only have the BOll policies but nearly the entire BOll Fund, amatter of existing dispute before this Court, was transferred to JPMC in 2008. The Debtors made slightobjection to JPMC's continuing use of the BOll Fund but dropped their objection in the face of a lawsuitby JPMC thereby foregoing the collection of any interest revenue which might have accrued to theestate. The interest on 5 billion dollars is not an insubstantial amount. C o n s i d ~ r i n g the frequentcomplaints voiced by the Debtors and Creditors regarding the rising costs of this case and the continuingloss of interest the Debtors, if they had intended to maximize the estate, could have pursued thisongoing source of income with more vigor.

* In addition to the FR Y9C's in attachment B here is, in attachment F, a graph from a WSJ online article about increased bank interest inBOLI/COU in general. A footnote on that graph clearly states that the large increase in JPMC BOLl/COLI in 2008 is a result of he WAMUtakeover.)

Contradictions of Debtors TestimonyFrom Confirmation Hearings as Noted(see attachment H)Confirmation Hearing 12/07/2010, page 277: 3-5, by Debtors attorney: " Of course, Your Honor, theequity committee put nobody on the stand to challenge the valuation that was performed by the


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A: I would say all of that analysis was completed by the financial team and relied upon to me from thefinancial team."Confirmation Hearing 12/03/2010, page 152:1-16, Mr. Carreon in response to attorney question:"Q: You are not here to testify in any form about the ownership of the overall tax issues as it respects tothe legal disputed aspect; is that right?A: I'm not here to testify with respect to the ownership of the refund. I am generally aware of theparties' positions bu t that's just based on my general knowledge.Q: So for example, with respect to the purchase assumption agreement, whether that belongs to WMIor the FDIC or to JP Morgan, you have no opinion on that whatsoever; is that right?A: I have deferred to our counsel with respect to any contract legal interpretation along those lines."

Confirmation Hearing 12/06/2010, page 241:5-12, Mr. Smith in response to attorney question:"Q: The [Kosturos] testimony is not accurate is it? You know in Quinn at least ,Quinn, Quinn and Weil didprovide analysis of the tax claim, don't you?A: I know that we certainly consulted with counsel on various aspects of the settlement, including theentitlement to the tax refunds."

Confirmation Hearing 12/03/2010, page 73:21-23,page 74:2-4,16-21, Mr. Goulding in response toattorney question:"Q: What did WMI tell the board in order to approve the plan?


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The 54 Billion Dollar question; Does i t Exist?Prior to the initiation of voting for the previous, denied, Plan of Reorganization Debtor requested thatFDIC and JPMC, by virtue of their huge combined financial stake be allowed to vote on confirmation ofthe plan. Debtor at that time introduced a 27 billion dolla r threat from JPMC and an equal amount fromFDIC for a combined total of 54 billion dollars. It s only against this staggering backdrop that someportions of the proposed Settlement Agreement seem fa ir and reasonable. However Debtor offers noplausible accounting to substantiate such an overwhelming claim.FDIC suffered no loss as a result of receivership and subsequent transfer of WMl's banking and othersubsidiaries to JPMC in return for 1.88 billion dollars.From FDIC proof of claim filed 03/30/2009 Section 'J', Other Matters Subject to the P&A Agreement:"43. The FDIC-Receiver asserts a protective unliqu idated claim for matters as to which (i) JPMC mayassert a claim against the Debtors as to the successor in interest to WMB and the FDIC Receiver underthe P&A Agreement and (ii) the Debtors may object to such a claim due to JPMC's lack of standing.44. Without limiting the foregoing, the matters as to which the FDIC-Receiver asserts this protectiveclaim include:

a) Claims relating to employee or retiree benefit plans, trusts, or insurance policies includingRabbi trusts" BOll/COLI policies and retirement or welfare plans, to the extent such plans,

Trusts or policies are or should be the property or responsibility of WMB;b) Claims relating to litigation proceeds as to which (i) JPMC claims an entitlement as


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Nowhere in this case has JPMC asserted a claim for any monies other than those items already incontention(see attachment I,JPMC 10 Q 09/30/2010 Washington Mutual Litigation). JPMC indicated,shortly after the takeover of WMB and other WMI subsidiaries, that it had written of f approximately 27billion dollars in uncollectable debt due to its acquisition of WAMU banks et al. The 27 billion dollarwrite offs represent, not a loss to JPMC, who had not put up any money fo r those loans but, a lesseningof profit based on return of principal and interest to JPMC from money which had been distributed tomortgagees and other WAMU bank debtors by a hither to JPMC competitor, WMB.JPMC in an Investor Presentation for a share offering dated September 25, 2008 touts the benefits toJPMC of acquiring Washington Mutual 's Banks.From that Presentation on the day FDIC took over "Washington Mutual 's Banks";"Strategic Fit--Greatly enhances retail banking platform in attractive markets.Financially Compelling-Accretive immediately; should be substantially so in the future.

Combined retail franchise has leading market share in key states.Transaction further strengthens the entire franchise.Cost Savings-Projected cost savings of approximately $1.5 billioncapital impact from transaction before capital raise (in billions)Tangible assets assumed $296Liabilities assumed $265Net assets $ 31**(with this footnote-'Excludes REIT preferred, subordinated debt and senior debt from Washington


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Apparently JPMC did not enter into this transaction heedlessly and a provable unliquidated claim of 27billion dollars is unlikely to appear.

Assuming that a BOll Fund did not exist and adding a claim for the entire BOll Fund and not solely thecash Surrender Value that JPMC claims as their due to an estimate including: WMB noteholder totalclaims (which the framers of this plan seek to settle fo r approximately 350 million dollars); includingemployee or retiree benefi t plans, trusts, or insurance poliCies; including claims relating to litigationproceeds ( the cap of which has been set at approximately 337 million dollars) would totalapproximately 18 billion dollars or a third of the figure Debtor has represented to the Court. If the BOllFund itsel f was to satisfy all claims in its own regard the figure at risk would be less than one fourth of S4billion dollars, altering the perception that tax refunds, BOll Funds, li tigation value, possiblemisappropriated subsidiaries etc. are not worth the effort it would take for WMI to recover them.

JPMC and FDIC'S protective unliquidated claims, until substantiated by valid accountable numbers aremere speculation and Debtor's repeti tion of the guesses of JPMC and FDIC is only hearsay. A fictitiousnumber should no t be allowed to carry weight when assessing this plan. Debtors are quick to decry theuse of speculative figures (see attachment H page 277:7-17 of 12/07/2010 Confirmation Hearing for anexample) that may upset their goals but have no aversion to foisting speculative, if not spurious,numbers on the Court in service of their plan.

Summation


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Attachments to this ob ject ion may be accessed on line at Pacer or KCC after this objection is posted.

Copies of the body of the objection have been sent by registered USPS ground mail to the following:

(a)

(b)

(c)

(d)

Washington Mutual, Inc.925 Fourth AvenueSeattle, Washington 98104Attn: Charles Edward Smith, Esq.;Weil, Gotshal & Manges LLP767 Fifth AvenueNew York, New York 10153Attn: Brian S. Rosen, Esq.;Richards Layton & Finger P.A.One Rodney Square920 North King StreetWilmington, Delaware 19899Attn: Mark D. Collins, Esq.;Quinn Emanuel Urquhart & Sullivan, LLP55 Madison Avenue, 22nd FloorNew York, New York 10010


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(h) Susman Godfrey LLP1201 Third Ave., Suite 3800Seattle, WA 98101Attn: Justin A. Nelson, Esq.;

(i) Ashby & Geddes, P.A.500 Delaware A venue, 8th FloorP.O. Box 1150Wilmington, Delaware 19899Attn: William P. Bowden, Esq.

CD Sullivan & Cromwell LLP125 Broad StreetNew York, New York 10004Attn: Stacey R. Friedman, Esq.; and(k) Landis Rath & Cobb LLP

919 Market Street, Suite 1800P.O. Box 2087Wilmington, Delaware 19899Attn: Adam G. Landis, Esq.(I) DLA Piper LLP (US)

1251 Avenue ofthe AmericasNew York, New York 10020Attn: Thomas R. Califano, Esq.(m) Young Conaway Stargatt & Taylor, LLPThe Brandywine Building1000 West Street, 17th Floor


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Exhibit 1, Attachments A, B,F, G, H, I and J


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Attachment AWMI Consolidated 1999-2007 10K Cash Flow ExcerptsWMI Consolidated 200806-30 10QCash Flow Excerpt


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[ No Subject]a View Contact10K for 2000WASHINGTON MUTUAL, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)NOTE 6: OTHER ASSETSOther assets consisted of he following:

Premises an d equipment .................................--. ~ ~ ~ ~ : e ~ ~ t ; ~ e ~ ~ n ~ ~ : ~ = b i ; ~ ~ . : ~ ~ ~ ~ ~ ~ ~ ~ : ::: :::: : : :::Foreclosed asse ts ..........................................Other assets ...............................................WASHINGTON MUTUAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS

DECEMBER 31 ,2000 1999(IN MILLIONS)$1,568 $1,5591,456 417--r;m '>mr

153 19 91,659 1,275

$5,993 $4,430

YEAR ENDED DECEMBER 31 ,

CASH FLOWS FROM OPERATING ACTIVITIESNe t income .................................Adjustments to reconcile ne t income to ne t cash prov-ided byoperating ac t iv i t i e s :Provision fo r loan an d lease losses .................Gain on sa le o f loans ...............................Loss from secur! t i e s .......... " ........... .......Depreciation an d amort izat ion.....................Stock dividends from FHLBs Transaction-related expense .......................Origination of loans he ld fo r sa le ...................Proceeds from sa les of loans held fo r sa le ...........Decrease (increase) in other asse ts ........ _..........Increase (decrease) in o ther l i ab i l i t i e s .............

Ne t cash provided by operat ing ac t iv i t i e s ..........CASH FLOWS FROM INVEST1NG ACTIVITIESPurchases of securi t i es ...........................Sales an d matur i t ies of securi t i es ......................Pr inc ipa l payments on securi t i es ..........................Purchases o f investment in FHLBs . . . Purchases o f loans .....................................Proceeds from sa les of loans .......................Orig inat ion o f loans , net o f pr inc ipa l payments .......Proceeds from sa les of foreclosed asse ts ..............Cash (used for) provided by acquisi tiona .................Purchases of premises an d equipment, ne t ..................C u r C h a s e s of bank owned l i f e insurance ....................

Ne t cash used by invest ing ac t iv i t i e s , car r iedforward .............................

2000

1,899

18 5(262)153 9

(221)(13,123)12,610

802592

3,022(2.843)3,8428.373

(136)(6,752)13,164(22.271)265(23)

(272)(1,000):1_______

1999(I N MILLIONS)

1,817

16 7( l09)12

400(139)

(4,996)B.960(506)

(336)5,270

(17,091)1,680

12/411(7B7)(7,357)55(16,571)

35 4(144)(319)

199B

1,4B7

16 2(133)30

31 3(112)82(13,501)18,238

25693

6,915(17.389)2,58510,010(344)(3,069)

49(7.733)60 940 0

(320)

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Fri. March 25. 2011 7.48:30 PM

j J. D ~ t )


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Decrease (increase) in other a s _(Decrease) increase in other liabilities

Netcash (used) provided by operating activitiesCasb Flows from Investing ActivitiesPurchases of securitiesProceeds from sales of mongage-backed securities ('MBS')Proceeds from sales and maturities of other avaiiabie-for-sale securitiesPrincipal payments on securitiesPurchases of nvestment in FHLBsProceeds from sales of loansOrigination and purchases of oans. net of principal paymentsProceeds from sales of foreclosed assetsNet cash used for acquisitionsPurchases of premises and equipment, netI Purchases ofbank-owned life insurance

Net cash used by investing activities. carried otword

iOK f ~ r 2 0 0 2 Note 7: Other AssetsOther assets consisted of the following:

YearEItdedDecemberJl.

Premises and equipment_ _ ~ I ~ Q y .stm""",ent in bank-owned life insuranceAccrued interest rece:lvibieForeclosed assetsGNMA pool buy-outsOther intangible assetsDerivativesOther

TOIlII other assets

$

S

200l lfIOl(maiRioDI)

2,862 1,9992,544 1,535_1,439 1,426336 2284,859 1,849311 1554,105 7453,462 2,45819,918 $ 10,395

WASHINGTON MUTUAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS

Year .aded DKemllerl1."""1

(iamUUons)Cash Flows rrom Operating AdivitieaNet income $ 3,896 $ 3,114Adjustments to reconcile net income to net cashprovided (used) by operating activities:Provision for loan and lease lossesGain from mongage loans

(Gain) loss from securitiesRevaluation (gsin) loss from derivativesGain on extinguishment of securities sold underagreements to repurchase

595(1,280)

(802)(2,396)

(282)

575(963)(717)

5(621)

1,899

185(262)

2

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1,418 793 (502)(1,394) 592 (336)(10,777) 3,022 5,270

(60,077) (2,843) (17,091)20,202 2,366 1,40931,691 1,476 27111,830 8,373 12,411(136) (787)13,164 55(1,677) (29,023) (23,928)257 265 354(13,818) (23) (144)(753) (272) (319)(1,000)


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1

(R


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1

impainnent (revenal) 466 (712) 3,219Stock dividends from Federal Home Loan Banks (40) (113) (191)Origination and pwchases of oans held for sale,net of principal payments (148,332) (315,106) (228,199)Proceeds from sales of oans l\eld for sale 127,429 323,570 220,856Net increase in trading securities (4,176) (1,045) (184)Decresse (increase) in other assets 1,635 275 (511)(Decr . . . increase in other liabilities (1,060) (1,038) 2,457

Net cash (used) provided by operating activitiesCasb Flows from Investing Activities (19,6%) 11,075 (139)Purchases of securities (5,586) (41,052) (54,197)Proceeds from sales and maturities of mortgage-backed securities 2,149 12,740 8,929Proceeds from sales and maturities of otheravaiiabie-for-sale securities 22,151 28,425 65,811Principal payments on securities 3,306 9,422 9,056Purchases of Federal Home Loan Bank srock (1,742) (336) (4)Redemption of Federal Home Loan Bank stock 1,185 719 798Proceeds from sale of mortgage servicing rights 638 997Origination and pwchases ofloans held in portfolio (120,012) (114,828) (76,777)Principal payments on loans held in portfolio 80,685 83,815 66,098Proceeds from sales of oans held in portfolio 844 1,429Proceeds from sales offoreclosed assets 453 479 333Net (increase) decrease in federal funds sold andsecurities purchased under agreements to resell (63) 1,996 466Net cash used for acquisitions (3,185)Purchases of premises and e q u i p m e n ~ net (585) (1,053) (1,030)Proceeds from sale of real estate held forinvestment 149~ h a s e s of bank owned life insurance (600)Proceeds from sale of discontinued operations, netof cash sold 1,223

Net cash (used) provided by investing activities (J 5,992) (17,457) 16,695(The Consolidated Statements of Cash Flows are continued on the next page.)Note 8: Other Assets

Other assets consisted of he following:Year Elided Dec'ember31.

Premises and equipment $ 3,140 $ 3,286Investment in bank..owned life insuranceccrued interest receivable 1,4 1,558Foreclosed assets 261 311Other intangible assets 195 251Derivatives 893 1,457Accounts receivable 3,917 4,309Other 1,388 1,366Total other assets 13,900 $ 15,120

10K for 2005WASmNGTON MUTIJAL, INC, AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS

Page 4 of7


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Purchases of premises and equipment, net (607) (585) (1,053)Proceeds from sale of eal estate held for investment 149Proceeds from sale of discontinued operations, net of cash sold _ _ _ ---1.m ___Net cash used by investing activities (14,618) (15,973) (17,450)

/ v o p ~ ~ C ; : w J : I ~ ~ D S U B S I D I A R I E S NOTES TO C O N S ( ) ~ A -kfi'FiNMib1.L STATEMENT S (CoBtiDued)

Note 8: OtherAssetsOther assets consisted of he following:

Premises and equipmentInvestment in bank-owned life insuranceinterest receivableForeclosed assetsIdentifiable intangible assetsDerivativesAccoonts receivableOtherTotal other assets

10K for 2006WASHINGTON MUTUAL, INC. AND SUBSIDIARIESCONSOUDATED STATEMENTS OF CASH FLOWS

Cash FI .. . from OperatingAdMtiesNet incomeAdjustments to recoocile income to net easb provided(used) by operating aetivities:Provisioo for loan and I""", lossesGain _ borne D\Qftgage loansGain _ credit card loons

Loss (gain) _ available-fur-sale securitiesLoss (gain) 00 extinguishmentofborrowinll"Gain 00 dispositioo of discontinued operatioos, net of axDepreciatiooand arnorti


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C.. Fl .... from Operating ActivitiesNet income (loss)A


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Accrued interest receivableDerivativesIdentifiable intangible . . . . sForeclosed assetsOther

2,0392,0933889793,847

1,9417485564803,231Total other assets $ 22,034 19,937

10Q for 2Q 2008

Othe_Assets

WASHINGTON MUTU AL, INC. AND SUBSIDIARIESCONSOUDATEDSTATEMENTS OF CASH FLOWS

(UNAUDITED)

Cu b Flow. from Openting Aetiviti .Net income (loss)Adjustments to reconcile net income (loss) to net cash provided by operating activities:Provision for loan lossesLoss (gain) from horne mortgage loansGain from credit card loansLo . (gain) on a v a i l a b l ~ f o r - s a l e securities(Gain) loss on estinguisbment of borrowingsDepreciation and amortizationChange in fair value ofMSRStock dividends from Federal Horne Loan BanksCapitalized interest income from option adjustable-rate mortgagesOrigination and purchases of oons held for sale, net of principal paymentsProceeds from sales of oons originated and held for saleNet decrease (inaeas e) in trading assetsIncrease in other assets(Decrease) increase in other liabilities

Net cash provided by operating ""tivitiesCu b Flows from Investiag ActivitiesPurcbues of available-for-sale securitiesProceeds from sal. . of available-tOr-sale securitiesPrincipal payments and marurities on a v a i l a b l ~ f o r - s a l e securitiesPurchases of Federal Horne Loan Bank stockRedemption of Federal Home Loan Bank stockOrigination and purchases of oons held in portfolio, net of principal paymentsProceeds from sales of loansProceeds from sales of foreclosed assetsNet (increase) decrease in federal funds sold and securities purchased under agreements to resellPurchases of premises and equipment, net/Vel N ; . J ~ : v ~ e s t i b a c t i ~

SiJ:MoatblEIIderd'- : ! ! .lOIIJ l807- - o ; ; - _ ~ $ (4,466) 1,614

9,423 60619 (214)(259)384 (41)(113) 7ISO 306492 333(72) (55)(591) (706)(18,605) (54,637)20,271 57,928481 (825)(570) (382)(437) 806,366 3,755

(5,694) (8,981)6,822 4,3701,566 1,227(130) (24)55 1,1882,138 6,52619 22,692545 354(873) 476(30) (123)4,4i8 27,705

Other assets consisted of he following:

Accounts receivableInvestment in bank-owned life insurance,.'-"---i'reIIlises and equipmentAccrued interest receivableDerivativesIdentifiable intangible assets

Det:elftberll,J_ lO ,200II l807--(.$ 5,490 $ 4,8375,165 2.!!IL-T,5'I4 2,7791,626 2,0391,809 2,093

Page 7of7


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Attachment BTrial Transcript: TransPerfect Legal Solutions 12/02/2010Pages/lines 382114-2,383/2-9

390/23-25, 39111 -25

640115-18


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IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWAREIn Re:WASHINGTON MUTUAL, INC., Chapter 11Et a l . ,

Case No. OS-12229(MFW)Debtors .Joint ly Administered)

BLACK HORSE CAPITAL LP,e t a l . ,

P la in t i f f s ,VS.

Adv. Proc. No. 10-513S(MFW)JP MORGAN CH;l\SE BANK, N.A.,e t a l . ,Ref. Nos. 105, 106, 108,109, 110, l1S, 139, 149Defendants.

924 N. Market Stree t , Courtroom 5Wilmington, DE

Page 269


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Page 3(l? Page 3841 12 think my answers. again, have been - I 2 There was some certain legal input3 haven't stated whether we think we're going 3 on that but there w a ~ a lot of review and4 to win or lose things. I have not revealed 4 analysis completed by the A&M team and the5 privilege. I have merely stated what the 5 WMlteam.6 facts are to my knowledge that are 6 Q. That was an analysis conducted by7 nonprivileged. 7 counsel?8 Q. All of these on this board are 8 MR. MASTANDO: Objection. your9 disputed assets, correct? 9 Honor.0 A. I disagree. 10 Q. In part by counsel you just said?1 Q. You have not assened any 11 A. Counsel had some input into that,2 litigation. every single one of these assets 12 yes.3 as beinl! owned bv the estate? 13 MR. NELSON: Your Honor, we move to4 A. At some point we did. But let's 14 strike that prior answer as either5 take BOLlfCOLl, for instance. The BOLl/COLI 15 revealing attomey-client privileged6 $5 billion we went through a line-by-line 16 infonnation and going beyond the scope7 analysis of that. and it is -- it has been 17 or opening the door for a reliance on8 detennined, at least for WMI. that we don't 18 counsel. given the fact that he just9 own the $5 billion. We potentially had some 19 testified that his analysis was in pan0 claims there but JPM has. to my knowledge. 20 due to counsel and that -1 probably liquidated those already. So. you 21 JUDGE WALRATH: Hedidn'ttell2 know. we -- we have potential claims there. 22 you-3 Q. I'm sorry. Those have already been 23 Well. was your statement regarding4 transferred and have been liquidated by 24 the BOll/COLI based on any advice of5 JPMorgan? 25 counsel?

Pagf 383 Page 3851 12 A. They were never under our control. 2 THE WITNESS: There would have to3 Q. You disputed these assets and 3 be some input from counsel.4 JPMorgan has liquidated them; is that right? 4 JUOOE WALRATH: Well, then J am5 A. I don't know. I'm sorry.' may 5 going to strike the testimony regarding6 have misspoken. don't know what JPMorgan 6 the BOLl/COLI.7 has done with those. But those assets are 7 MR. MASTANDO: Your Honor. I would8 not owned by WMI. Those assets were on the J 8 ask that the questions be stricken as

' - 9 balance sheet of WMB. 9 well because counsel is asking him. I


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Attachment BTrial Transcript: VERITEXT REPORTING COMPANY 12/07/2010

Pages/lines 278114-17


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Page 1UNITED STATES BANKRUPTCY COURTDISTRICT OF DELAWARE

x

In the Mat ter of:WASHINGTON MUTUAL, INC., ET AL., Case No.

Debtors . 08-12229 (MFW)-x

8 BLACK HORSE CAPITAL LP, ET AL., Pla in t i f f s , ADV. Proceeding- aga ins t -

10 JPMORGAN CHASE BANK, N.A., ET AL., Defendants11 - x

12 BROADBILL INVESTMENT CORP., P l a i n t i f f ,13 - agains t -14 WASHINGTON MUTUAL, INC., Defendant1516 U.S. Bankruptcy Court17 82 4 North Market St ree t

No. 10-51387 (MFW)

ADV. ProceedingNo. 10-50911 (MFW)


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WASHINGTON MUTUAL, INC., ET AL.Page 278

18 c la im. There i s a l a wsu i t pending wi th r e s p e c t to t h a t with2 r e s p e c t to some pe op l e . They have n ot f i l e d - - I b e l i e v e Mr .3 J a r v i s in Apr i l sa id t h a t they were s u b j e c t to the MDL. But o f4 course they a re no t p a r t o f t h a t , Your Honor; they a re merely5 he re because they f i l e d a c la im a g a i n s t the e s t a t e . We w i l l6 t ake care of t h a t , Your Honor, when we ge t toge ther n ex t week.7 But one l a s t p o i n t , Your Honor, and I a po l og i z e if I8 say th e name wrong, Ms. Sl a t ko , t he r e f e r ences to the f ive9 b i l l i o n d o l l a r s and th e BOLl/COLI, Your Honor, t h a t i s not

10 anything t h a t i s c o n s i s t e n t with t he r e c ord o f t h i s case and I11 would j u s t ask th e Cour t to c ons i de r t h a t as h er argument and12 not c e r t a i n l y the f a c t s as we heard the t es t imony. I b e l i e v e13 tha t Mr .14 THE COURT: Ha s the BOLl/COLI i nsura nc e been15 t r ans fe r red?16 MR. ROSEN: No , Your Honor .


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r

Attachment BBoard ofFederal Reserve Governors Forms, FR Y 9-C


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FRY-ICLasc Update: 200909:2 .125832Board of Governors of the Federal Reserve System

0M8 _7100 -0128A1IIJ.1In. , . , ........... 38.35EJqIiree Men:h 31. 2008

Consolidated Financial Statements forBank Holding Companies-FR Y-9CReport at the close of business as of the last calendar day of the quarterThis Report is required by laW: Section 5(c) of the Bank H0lding Company Act (12 u.s.c. 1844) and SectIon 225.5(b) ofRegulation Y (12 CFR 225.5(b.This report fonn is to be filed by bank holding companlee with totalllOIISOIidatedusetsofSlOOmillionormore.lnaddition.bankholdingcompanies meeting certain afteria must file this RIport (FR V-8C)regardlelaof 1Iize. See page 1 of the genenJlll1IIructions for fUrtherNOTE: Each bank holding c:ompany's board of diredora and seniormanagement are nISJIC)IlIIibIe for establishing and maintaining aneffective system of ntemaI conIroI.lnduding controIa over the ConIOIidated F'1NIIICiaI StatemenIs for Bank Holding Companies. TheConaoIidaI8d Financial StaIiamenta for Bank Holding Companiesare to be pn!p8red in accordanoa with inItructIons provided by theFedanIIReeerveSyatam. TheConeolidaledFinancialStrnemantsforBank HoldingCompaniesmust be signed and attee$ad by the ChiefFinancialOfficer (CFO) of the I8pOIting bank holding company (orby the individual pedorming thill equivalent function).I, the undarlignedCFO (or equivalent) of he named bank holdingcompany,atteatthattheConaolidatedFinanc:ialSlalllmenlaforBankHolding CoqIanies (including the supporting achadules) for thisreportdatehavebeen prapaf8d n conformance with the inItructIons

information. However, when 8UCh bank holding companies own orcontrol, or are owned or controlled by, other bank holdingrues, only the top.tier hoidlng company must fila this AIPOrt for theCOII8OIidated holding company organization. The Federal Re8eIvemay not conduct orsponsor. and an organization (or I pelIOn) snotrequired to respond to. a collection of Infonl.1ion unless Itdisplaysa aJn8/l11y valid OMS control number.Date of Report:December 31, 2007


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FR Y-9CPage 17RSSO 10:

Schedule HC-F-Other AssetsDollar Amounts In Thousands-t-""-"=+-_-"-__ - " -_- - I

1 Accrued Interest receivable'2 Net deferred tax assets' [2148 123 Interest-onl y striPS receivabl e (not In the form of a secunty)J on - - , - ,1- _

a Mortgage loans A2 19_ _ _. _ _J 3 ab Other financial assets f A5,20 1 - , - - - - - ~ - - - J 3 b

, . . . . - ' " ' _ " - ' _ , . r " " b e " " - " s ' - ' t ! . ! ! h i l . l ~ ~ ~ ~ ~ a b l e f a , , _ ~ l : ' ~ s ~ __ _ - - - - - Ii 1 7 5 ~ ~ ... kl - T ? L i i i ' f e ~ ' n ~ s u ~ r ; ; , a n _ c e : . o . - c a " , s s e , - = - t ; ' : ' S " : " - ' ______ ______ : : ' - _ ' : " : ' - ~ _ : : ' - ~ ~ ~ ' " f l " C ' f i Q 0 ' ; l ! L ? , , ~ - - - : --, ' --- her I 216__ _ ' _ ~ _ 6f

boC! 'Total (sum of Items 1 through 6) (must equal Schedule He. Item 11) - 2 1 6 0 ~ , __ 7

Indude a=ued Interest reoeivable on loans, leases. debt secunties and other Interest-beanng assetsSee discussion of deferred income taxes ,n Glossary entry on "income taxes "Report Interest-only strips receIVable in the form of a securrty as available-for-sale secunlles In SchedUle HC, Ilem 2 b or as trading assetsin Schedule HC. rtem 5, as apptopriate4 Indude Federal Reserve slock, Federal Home loan Bank slock. and bankers' bank slock

Schedule HC-G-Other LiabilitiesNot applicable

2 Net deferred tax liabilities'Allowance for credit losses on off-balance sheet credit exposures

4. Other5 Total (sum of Items 2 through 4) (must equal Schedu le He rtem 20)

1 See diSCUSSIOn of deferred Income taxes In Glossary entry on "income taxes.'

Schedule HC-H-Interest Sensitivity1Dollar Amounts In Thousands IsHcK ---i- -1 '

, - - - - . - - - - . " . - - . - ~ - - - , ~ - -


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FRY-9CLast Update: 20090912.132202Board of Governors of the Federal Reserve System

OMB Number 7100-0128Avg. hrs. per response: 40.50Expires February 28, 2011

RSSO 10: 1039502

Consolidated Financial Statements forBank Holding Companies-FR Y-9CReport at the close of business as of the last calendar day of the quarterThis Report is required by law: Section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844) and Section 225.5(b) ofRegulation Y (12 CFR 225.5(b.This report form is to be filed by bank holding companies with totalconsolidated assetsof$500 million ormore. In addition, bank holdingcompanies meeting certain criteria must file this report (FR Y-9C)regardless of size. See page 1 of he general instructions for furtherNOTE: Each bank holding company's board of directors and seniormanagement are responsible for establishing and maintaining aneffective system of intemal control, including controls over the Consolidated Financial Statements for Bank Holding Companies. TheConsolidated Financial Statements for Bank Holding Companiesare to be prepared in accordance with instructions provided by theFederal Reserve System. The Consolidated Financial Statements forBank Holding Companies must be signed and attested by the ChiefFinancial Officer (CFO) of the reporting bank holding company (orby the individual performing this equivalent function).I, the undersigned CFO (or equivalent) of the named bank holdingcompany, attestthat the Consolidated Financial Statements for Bank

information. However, when such bank holding companies own orcontrol, or are owned or controlled by, other bank holding companies, only the top-tier holding company must file this report for theconsolidated holding company organization. The Federal Reservemay not conduct or sponsor, and an organization (o r a person) is notrequired to respond to, a collection of nformation unless it displaysa currently valid OMB control number.Date of Report:June 30, 2008Month I Date I Year (BHCK 9999)


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Schedule HC-F-OtherAssetsDollar Amounts in Thousands

1. Accrued interest receivable1 ..................................................................................................2. Net deferred tax assets2 ....................................................................................................... .3. Interest-only strips receivable (not in the form of a security)3 on:

a. Mortgage loans ................................................................................................................b. Other financial assets ......................................................................................................

4. Equity securities that 00 NOT have readily determinable fair values4 ................................ .5. Life insurance assets ............................................................................................................6. Other ................ ................. ................ ................. ................ ................. ................. ................ .

RSSO 10: 1039502

BHCK I IB556 78570002148 0

A519 0A520 7690001752 2642000COO9 137350002168 = 99472000bhct

FRY-9CPage 20

1.2.3.a.3.b..4 .1 i ~ 6.

7. Total (sum of items 1 through 6) (must equal Schedule He, item 11) ..................... ............. . 2160 - ~ 7 . 1. Indude accrued interest receivable on loans, leases, debt securitiesand other interest-bearing assets.2. See discussionof deferred income taxes in Glossary entry on "income taxes."3. Report interest-only strips receivable in the form of a security as available-far-sale securities in Schedule HC, item 2.b, or as trading

assets in Schedule HC, item 5, as appropriate.4. Indude Federal Reserve stock, Federal Home Loan Bank stock, and bankers' bank stock.

Schedule HC-G-OtherLiabilitiesDollar Amounts in Thousands BHCK T I

1. Not applicable 02. Net deferred tax liabilities1 ..................................................................................................... 1-=-304::..:..::9-+-_----_-+--_ _ _ = _ 6860003. Allowance for credit losses on off-balance sheet credit exposures ....................................... I-=B.:..:55:.:.7-1-_----_-t-__

1682520004. Other ................. ................ ................. ................ ................ ................. ................ ................ ... I - = B 9 8 4 . : : . . = . . : - I - _ - - < ~ _ ~ _ ~ bhct

1689380005. Total (sum of items 2 through 4) (must equal Schedule He, item 20) ................................... L . . : : . 2 7 : . . : 5 0 = - = - L - _ ~ - - = . . : . . : : . . : ; . . : . . . : . . : : . . : . : . J 1. See discussion ofdeferred income taxes in Glossary entry on "income taxes."

Schedule HC-H-Interest Sensitivity1

2.3.4.5.


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FRY-9CLast Update: 20090912.132203Board of Governors of the Federal Reserve System

OMB Number 7 1 ~ 1 2 8 Avg. hrs. per response: 40.50Expires February 28, 2011

RSSD ID: 1039502

Consolidated Financial Statements forBank Holding Companies-FR Y-9CReport at the close of business as of the last calendar day of the quarterThis Report is required by law: Section S(c) of the Bank Holding Company Act (12 U.S.C. 1844) and Section 225.S(b) ofRegulation Y (12 CFR 22S.5(b.This report form is to be led by bank holding companies with totalconsolidated assetsof$500 million ormore. In addition, bank holdingcompanies meeting certain criteria must Ie this report (FR Y-9C)regardless of size. See page 1 ofthe general instructions for furtherNOTE: Each bank holding company's board of directors and seniormanagement are responsible for establishing and maintaining aneffective system of ntemal control, including controls over the Consolidated Financial Statements for Bank Holding Companies. TheConsolidated Financial Statements for Bank Holding Companiesare to be prepared in accordance with instructions provided by theFederal Reserve System. The Consolidated Financial Statements forBank Holding Companies must be signed and attested by the ChiefFinancial Of cer (CFO) of the reporting bank holding company (orby the individual performing this equivalent function).I, the undersigned CFO (or equivalent) of the named bank holdingcompany, attest that the Consolidated Financial Statements for Bank

information. However, when such bank holding companies own orcontrol, or are owned or controlled by, other bank holding companies, only the top-tier holding company must Ie this report for theconsolidated holding company organization. The Federal Reservemay not conduct or sponsor, and an organization (o r a person) is notrequired to respond to, a collection of information unless it displaysa currently valid OMB control number.Date of Report:September 30, 2008Month'Date' Year (BHCK 9999)


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Schedule HC-F-OtherAssetsDo"ar Amounts in Thousands1. Accrued interest receivable1 . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .

2. Net deferred tax assets2 ..................................3. Interest-only strips receivable (not in the form of a security)3 on:

a. Mortgage loans ................................................................................................................b. Other financial assets .......................................................................................................

4. Equity securities that DO NOT have readily determinable fair values' ................................. .5. Life insurance assets ............................... " ..........................................................................6. Other .....................................................................................................................................

RSSD 10: 1039502

BHCK 1 IB556 94380002148 8809000A519 0A520 7530001752 6892(100C009 / " 188460002168 ~ ' l 2 L86000bhct -

FRY-9CPage 20

1.2.3.a.3.b.

6.2160 7 186924000 ')T.7. Total (sum of tems 1 through 6) (must equal Schedule He, item 11) .................................... L . : : : . . : . = . : : . . . . L . . - t : : = = : : = : : : : : ~

1. Include accrued interest receivable on loans, leases, debt securities and other interest-bearing assets.2. See discussion ofdeferred income taxes in Glossary entry on "income taxes.3. Report interest-only strips receivable in the form of a security as available-for-sale securities in Schedule He, item 2.b, or as tradingassets in Schedule HC, item 5, as appropriate.4. Include Federal Reserve stock, Federal Home Loan Bank stock, and bankers' bank stock.

Schedule HC-G-OtherLiabilitiesDo"ar Amounts in Thousands BHCK T I

1. Not applicable02. Net deferred tax liabilities1. . . . . . .. . . . . . . . . . . . .. .. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . . . . . . . t--=-304::....:.::9+_---41--___ ....:....j7100003. A"owance for credit losses on off-balance sheet credit exposures ....................................... I-=B5::.:5:.;.7+_----


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FR y . ~ c " iY : :Jr"!'I' " .Board of Governors of the Federal Reserve System

OMS Number 7100..{;128/.o:vg Ors pel response AQ 5eE (PI'e!. February 28 20 11

RSSDIO;

Consolidated Financial Statements forBank Holding Companies-FR Y-9CReport at the close of business as of the last calendar day of the quarterThis Report IS required by law Sect lcn 51c) of the Bank Holdmg Company Act (12 US C 1844) and Section 2255(b) ofRegulation Y (12 CFR 225 5(bT ~ l s report form IS to be flied by bank hCidlng companieS with totalconsolidated assets of $500million or more In addition bank hOldingcompanies meeting certain cntena must file thiS report IFR Y9C)regardless of size See page 1of the general instructions f or furtherNOTE Each bank hold .ng company's board of directors and seniormanagement are responsible for establishing and maintaining aneffective system of Intemal control. including controls over the Consolldated FIOanaal Statements for Bank Holding Companies TheConsolidated Financial Statements for Bank Holding Companiesare to be prepared In accordance with instructions provided by theFederal Reserve System The Consolidated FinanCial Statements forBank Holding Companies must be S'9ned and attested by the ChiefF,nanaal Officer (CFOI of Ihe reportIOg oank holding company (orby the individual performing thiS eqUivalent functIOn)I the undersigned CFO (or eqUivalent) cf the named bank holdingcompany, attest that the ConSOlidated Financial Statements for SankHolding Companies (inCluding the supporting schedules) for thiSreport date have been prepared In conformance wtlh the Instructions

Information However, when such bank holding companies own orcontrol. or are owned or controlled by other bank holding compa-nies. only Ihe topher holding company must file Ih,s report for theconsohdated hOldmg company organIZation The Federal Reservemay not conduct or sponsor, and an orga'1lZa!ion (or a per son, IS notreqUired to respond to, a collection of mformatlon unless It displaysa currently valid OMS control numberDate of Report


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RSSO 10:

Schedule HC-F-Other AssetsDollar Amounts In Thousands S.:K:K ' .;. ... . . . . . . . . . ..... ~ ' - r l --"-, Accrued Interest receivable

2 Net deferred tax assets'Interestonly striPS rece,vable Inot tr the form of a secunty)' ona Mortgage loansb Other finanCial assets

?lEqUi ty securit,es that 00 NOT have readily determ,nable fal( values'C Y ~ ' f e Insurance assets

6 Other7 Total {sum of ,terns 1 through 6} (must equal Schedule HC, ,tern 11)

1 Indude accrued 'nteresl receivable on loans. leases. debl seconltes and olher ,nleresH>eanng assels2 See disCUSSIOn of deferred Income laxes '" Glossary entry on ",ncome taxes -

2148

3 Report .nlereslonly slnps receIVable ,n tm! form of a secunty as avatlableforsale seCtlntll!s ,n Schedule HC lIem 2.b or as trad'ngassets ,n Schedule HC, ,Iem 5. as appropllate4 Indude Federal Reserve stoet


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FR Y-9C

Board of Governors of the Federal Reserve SystemOMS Numbef 7 1 ~ 1 2 8 4'-9 ~ r s pe t t e s p o n ~ 65-E:':plea March 31, 2011

RSSDID:

Consolidated Financial Statements forBank Holding Companies-FR Y-9CReport at the close of business as of the last calendar day of the quarterThIS Report IS reqUIred by law SectIOn 5{C) of the Bank HoldIng Company Act (12 USC 1844) and SectIon 2255(b) ofRegulabon Y (12CFR 225 SIb))This report fonn IS to be filed by bank holdIng companres WIth totalconSOlidated assetsof$600million or more. In addlbon, bank hOldingcompantes meetIng certaIn critena must fIle thIS report (FR Y-9C)regardless of size See page 1 ollhe general InstructIons for furtherNOTE Each bank holdIng company's boardof directors and seniormanagement are responsible lor establiShing and maintalOlng aneffective system of Intemal control. Including controls over Ihe ConsolIdated Financial Statements for Bank HoldIng Companies TheConsolidated Financial St atements lo r Bank HoldIng Companiesare to be prepared in accordance with rnstructions provided by theFederal Reserve System. The Consolidated FinanCIal Statements lorBank HoldIng Companies must be signed and attested by the ChlelFtnanClal OffICer (CFOI of the reporting bank holdIng company (orby the IndiVIdual perfonnlng thIS eqUivalent function)I, the undersIgned CFO (or eqUivalent) of the named bank holdIngcompany, attestth atthe Consohdated FInanCIal Statements for BankHolding Compantes (IncludIng the supporttng schedules) lor thISrepOrt date have been prepared in confonnance wrth the instructions

Inlonnatlon. However, when such bank holding companies own orcontrol, or are owned or controlled by_ other bank hOlding companres, only the tOp-!ler holding company must fde this report for theconsolidated holding company organizatIon The Federal Reservemay not conduc t or sponsor, and an organizatIOn (or a person) is notreqUIred to respond to, a coHection of In!ennabon unless it dISplaysa currently vahd OMB control numberDate of Report,December 31, 2009Month,r Dare 1 'tear \8HCI( 9999)


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Schedule HC-E-Deposit Liabilities1QQ!!ilrAmoYoll! iO ThQJ,!saOsl!

1. Deposits held in domestic offioes of commercial bank subsidiaries of the reporting bankholding company:a, Demand deposits... .b. NOW,ATS, and other transaction accountsc Money market deposit accounts and other savings accounta. .d. TIme deposits of ess than $100,000e. TIme deposits of $100,000 or more t are subSidiaries of the. Deposits held in doll l8$tic offices of other depository institutions thareporting bank holding company:a. Noninlerestbearing balancesb. NOW, ATS, and other transaction account s-..c. Money market deposit accounts and other savings accountsd. Time deposits of less than $100,000e. TIme deposits of $100,000 or mOle-.

MEMORANDA QQIk![AmoUDll! in Thgysandsone year or less. Brokered deposits less than $100,000 with a remaining maturi1y of2 Brokered deposits less than $100,000 with a remaining maturi1y of3. TIme deposits of $100,000 or more with a remaining maturi1y of onemore than one yearyearorlesa4 Foreign office time deposits with a remaining maturi1y of one year 0 rless

a-cal2210 578020003187 159060002389 4373720006648 414750002604 90552000

IIHX3189 03187 02389 06648 02604 oj

BHOMA2043 1401000Al64 2945000A242 83006000BHFNA245 97654000

1. The 9UT1 ofllems 1 a through 1 e and items2.a through 2 errustequallhe sum ofSchedule He, items 13.a.{1) and 13,a,(2).

Schedule HC-F-OtherAssets1. Accrued interest receivable12. Net deferred tax assets23. Interest-only strips receivable (not in the form of a securi1y)3 on:

FR Y-9CPage 24RSSO 10:1039502

1.a.1.b.1c.Id .I.e.

2.a.2,b.2,c.2.d.2e .

M.l.M.2.M.3,M4.


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FR r-9C

Board of Governors of the Federal Reserve SystemOMS Nurnbe-r j'10G-0126Avg hrs Pe1 fes.pot'Ir.e


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RSSDID:Schedule HC-E-Deposit Liabilities'_____ ___. ___ . ____". _ . "__. _.Dollar ~ ~ o u n t s In T h O U S ~ ~ ~ S _ ; B H c B f - - - - T - - - - ~ - - - - -J

DePOSitS held In domestic offices of commerCial bank subsidiaries of the reporting bankholding companya Demand depOSitsb NOW ATS and other transaClfOn accountsC Money market deposit accounts an,j other savings accountsd Time depOSits of less than $100.000e Time depOSItS of $100 000 or more

2 DepoSits held In domestic offices of ottler deposrtory institutIons that are subsJdlanes of thereporting bank holding companya Nonlnterest-beanng balancesb NOW. ATS. and other transaction accountsc Money market deposit accounts and other savings accountsd Time deposits of less than $100.000e Time depoSIts of $100000 or more

MEMORANDA

2 Brokered depOSits less than $100.000 with a remaining matur ity of more than one year3 Time depOSits of $100 000 or more Wllh a remalnong maturity of one year or less4 Foreign office time depOSits with a remaining matunty of one year or less

:-2210 r-- : -,~ ~ - - - - - - . ~ - - - - - - t 3187. ..'------'r-.~ ~ ~ - - - - - - - - - -'6648 i'2604 :i -.BHOD:31891, : i 1 8 i i - - - - - - ~ - - - : l ~ ~ ~ l ! 2 6 0 4 . ~ i ________

1 1he sum of Items 1 a through 1 e and Items ;. a through 2 e must equal the sum of Schedule HC Items 13 a (1) and 13.a i2l

Schedule HC-F-Qther Assets1 Accrued Interest receivable'2 Net deferred tax asset s'


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Media Upload Sign Up

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Attachment FOnline.wsj article


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By ELLEN E. SCHULTZBanks are using a little-known tactic to help pay bonuses, deferred pay and pensions theyowe executives: They're holding life-insurance policies on hundreds of thousands of theirworkers, with themselves as the benefiCiaries.Banks took out much of this life insurance during the mortgage bubble, when executives'pay - and the IOUs for their deferred compensation - surged, and banking regulatorsaffirmed the use of life insurance as a way to finance executive pay and benefits.Bank of America Corp. has the most life insurance on employees: $17.3 billion at the endof the first quarter, according to bank filings. Wachovia Corp. has $12 billion, J.P. MorganChase & Co. has $11.1 billion and Wells Fargo & Co. has $5.7 billion. (Wells Fargoacquired Wachovia at the end of last year.)The insurance poliCies essentially are informal penSion funds fo r executives: Companiesdeposit money into the contracts, which are like big, nondeductible IRAs, and allocate thecash among investments that grow tax-free. Over time, employers receive tax-free deathbenefits when employees, former employees and retirees die.Though not improper, the practice is Similar to what is known as "janitors insurance, n aninsurance-on-employees technique that has long been controversial. Critics say the banks'insurance contracts are a way for companies to create tax breaks for funding executivepenSions. And some families have complained that employers shouldn't prof it from thedeaths of their loved ones.

Wanted: Dead or Alive8anIcs have bought an Increeslng amount of 1It.Insuranc:e onernptovees to finance uecutlve deferred compensation.Ufe-lnsurance assets In bliionsBark ot rl'lIfnca-

oI 4 8 12 516 bill.


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Banks are far from alone in buying such company-owned life insurance, or COllThousands of companies do it, including American International Group Inc., Fannie Mae,Freddie Mac, Kimberly-Clark Corp. and Tyson Foods, Inc. But banks have been among thelargest players, pumping billions more into new policies since the 2006 rules were put inplace. .Last week, the Treasury proposed eliminating companies' ability to deduct interest onloans related to COLI. This would have little impact on banks, which don't borrow moneyto invest in life insurance. The proposal would also leave untouched the major tax breaksof the practice.Banks had a total of $122.3 billion in life insurance on employees at the end of 2008,nearly double the $65.8 billion they held at the end of 2004, according to a Wall StreetJournal analysis of bank filings. Unlike other companies, banks are required to disclosetheir total life-insurance holdings in regulatory filings.In recent years, the Office of the Comptroller of the Currency affirmed that banks can buylife insurance to finance employee benefits. But filings show that executive compensationaccounts for most of the benefits.J.P. Morgan, for instance, had $10 billion in deferred-pay obligations, compared with $1billion in retiree health obligations at the end of 2008. Offsetting these obligations was$12 billion in bank-owned life insurance, or BOll. A spokesman for J.P. Morgan confirmsthe figures.Citigroup Inc. had $919 million in unfunded retiree-health obligations, $586 million insupplemental executive pension obligations, and roughly $5 billion in deferredcompensation. Offsetting these obligations: $4.2 billion in life insurance. A spokesmansays Citigroup bought BOll because it was "an attractive use of capital," and fo r "the tax-free nature of the death proceeds."Bank of America doesn't disclose its deferred-compensation obligations, but filings showthat at the end of 2008, its retiree health plan had an unfunded obligation of $1.3 billion,


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former employees die. Pacific State Bancorp, of Stockton, calif., recently reported $2.6million in income from a death benefit in 2008. The company didn't respond to requestsfor comment.A subsidiary of Conseco Inc., Bankers Life & Casualty, which bought life insurance onemployees in 2006, received $2.7 million that year from a death benefit, according tofilings. A spokesman says the bank bought the insurance "to offset the expense ofdeferred compensation."Over the coming decades, banks will receive an estimated $400 billion in death benefits,consultants estimate. The death benefits sometimes are referred to in filings as "mortalitydiVidends" or yields." Employers track the deaths of former employees by checking SocialSecurity Administration records.As an incentive to get employees to consent to being covered, some companies offer thema small portion of the death benefit. But the coverage may end when they leave thecompany.In December, Irma Johnson aCcidentally received a check for $1.6 million, from SecurityLife of Denver Insurance Co., payable to Amegy Bank. According to a lawsuit Mrs. Johnsonfiled in February in a Houston state court, in 2001 the bank told her husband, DanielJohnson, a credit risk manager who had survived two brain surgeries, that he was eligiblefor supplemental life insurance of $150,000, if he signed a consent form authorizing thebank to purchase an insurance policy on his life. Four months later, the bank fired him.Mr. Johnson died from a brain tumor at age 41 in 2008. His widow and two young childrenreceived no life-insurance benefits, which the bank had canceled when Mr. Johnson left.Mrs. Johnson says her husband was cognitively disabled when he signed the consentform.A spokeswoman for Amegy Bank, a unit of Zions Bancorp, declined to comment on thesuit, but said, "Participation in Amegy's BOU plan was completely voluntary; employeesconsented to participate."


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Attachment HTrial Transcript VERITEX REPORTING COMPANY 12/07/20 I 0

Pagelline 276/19-25,277/1-11


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rPage 1

UNITED STATES BANKRUPTCY COURT2 DISTRICT OF DELAWARE3 -. - x

4 In the Mat ter of :5 WASHINGTON MUTUAL, INC., ET AL., Case No.6 Debtors. 08-12229 (MFW)7

8 BLACK HORSE CAPITAL LP, ET AL., Pla in t i f f s , ADV. proceeding9 - agains t - No. 10-51387 (MFIf)

10 JPMORGAN CHASE BANK, N.A., ET AL., Defendants.11 -x12 BROADBILL INVESTMENT CORP., Pla in t i f f ,13 - aga ins t -14 WASHINGTON MUTUAL, INC., Defendant1516 U.S. Bankruptcy Court

ADV. ProceedingNo. 10-50911 (MFIf)


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WASHINGTON MUTUAL, INC., ET AL.Page 27 6

the r e l e a s e s t ha t one could arque t ha t th e equ i ty ho lder s a r e2 i nd i r e c t l y re leas ing t h e i r c la ims . Again , Your Bonor, tha t i s3 no t our i n t en t . An d if it i s by wa y of u t i l i z a t i on o f a4 de f i n i t i on tha t achieves tha t r e s u l t , Your Bonor, we would l i ke5 to make c l e a r on th e record here t ha t we ' l l modify t h a t6 de f i n i t i on to make c l e a r tha t we a re no t asking an y equ i ty7 ho lder to re lease a c la im pur suan t to 43 .6 o r any o the r8 proviSion of the p lan .9 Ms. Leamy s tood up, Your Bonor, and made a comment

10 ab o u t the op t -ou ts and the f ac t tha t th e b a l l o t - - or th e11 prov is ion may have changed and it may not have been on th e12 b a l l o t a t th e t ime t ha t pe op l e went and opted out o f it . Your13 Bonor, aga in, if t h i s would c l e a r up an y c onfus i on , we a re14 happy to i nc lude in the conf i rmat ion order a prov is ion t ha t we15 wi l l go an d as k anyone who opted ou t if they want to change16 t h e i r mind. An d I be l ieve tha t i s what Mr . Sacks had ind ica ted


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WASHINGTON MUTUAL, INC., ET AL.Page 277

aspec t t o tha t t he r e wa s a s t a t ement about the value of r eo rg2 WMI3 Of cour se , Your Bonor, the equ i ty commit tee pu t nobody4 on the s tand t o cha l l enge the va lua t ion t ha t wa s performed by5 the Blacks tone group an d r ep resen ted by Mr. Zel in on the s t and .6 An d o f course they have re ta ined Pete r J . Solomon and they~ - - -7 could have c e r t a i n l y pu t someone on to do t h a t . But the u s ag e8 o f an y NOL, Your Bonor, has been t e s t i f i ed to , has been9 inc luded in the d e c l a r a t i o n s , and somebody ou t the re I know

10 wrote a repor t about it a t one po in t in t ime t ha t sa id t ha t it11 was ac tua l ly s p e c u l a t i v e . And Mr, Zel in went th rough t ha t on12 th e stand t ha t the usage of t ha t wa s ext remely specu la t ive .13 And th e f a c t tha t only t h i r t y - o n e m i l l i o n do l l a r s o f14 subsc r ip t ion r i gh t s were ac tua l ly exerc ised makes the usage o f15 an y NOL even more suspec t because the re isn't enough money to16 genera te the kind o f i n c o _ tha t would u t i l i z e an y NOL o f t ha t


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Q. You assume in your November report that there will be azero dollar cancellation of debt. Is that correct?A. That's my understanding, yes.Q. And that1s based on what the debtors told you?A. The analysis they had done, yes, that's correct.

Source: p. 88:10-17


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Hearing Testimony Of Kosturos, 12/02/10

Q. . .Again, without getting into the substance, Weiland Quinn both undertook analysis about the worthof the tax refund claim, correct?

A. I would say all of that analysis was completed bythe financial team and relied upon to me from thefinancial team.


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Q. The [Kosturos] testimony is not accurate, is it?You know in Quinn at least, Quinn, Quinn andWeil did provide analysis of the tax claim, don'tyou?

A. I know that we certainly consulted with counselon various aspects of the settlement includingthe entitlement to the tax refunds.

Source: p. 241:5-12


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Hearing Testimony Of Goulding, 12/03/10Q. What did WMI tell the board in order to approve the plan?A. The conversation would've been in connection withcounsel, so I think that would be a privileged conversation ..

.1wasn't on the call in which the board actuallyapproved the plan, so I don't know.Q. . .When the board discussed whether to approve the

settlement, what did WMI discuss with the board regardingthe worth of the assets that were planned to settled?

MR. MASTANDO: Objection. I think the witness just answeredhe wasn't present, your Honor.

Source: pp. 73: 21-23; 74: 2-4; 74: 16-21


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WMI: Cconlklt . ol Lim ... A .. .PrivilelC'd _ad Corllldmal.IJ1WMIl121110

HIGHLY CONFIDENTIAL

w ... ..... Mutual. w.Mr:t1ins of ite 80ud"t DirectorsMiA\IIQ

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Attachment IF r o m ~ M C 10 Q 09/30/2010


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Attachment JJPMC INVESTOR PRESENTATION September 25,2008


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SEPTEMBER 25, 2008

JPMorgan Chase & Co. has filed a registration statement (including aprospectus) with the SEC for the offering to which this communication relates.Before you invest, you should read the prospectus in that registrationstatement and other documents JPMorgan Chase & Co. has filed with the SECfor more complete information about JPMorgan Chase & Co. and this offering.You may get these documents for free by visiting EDGAR on the SEC web siteat www.sec.gov. Alternatively, JPMorgan Chase & Co. or J.P. MorganSecurities Inc. will arrange to send to you the prospectus i f you request it bycalling toll-free 1-866-430-0686.

Acquisition of assets, deposits and certain liabilities of Washington Mutual's banks byJPMorgan Chase

JPMORGAN CHASE &Co.


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Key terms of acquisition of Washington Mutual's banksfrom FDIC acting as receiver

Transaction

ConsiderationExpected capitalraiseDivestituresApprovalsCredit rating

JPMorgan Chase to acquire: Substantially al l of the assets of Washington Mutual's banks All of the deposits and certain liabili ties of Washington Mutual'sbanksTransaction does not incLude: Assets and liabilities of Washington MutuaL Inc. (Holding Company) Unsecured senior debt, subordinated debt and preferred ofWashington Mutual's banks$1 9bn cash payabLe to FDIC$8.0 billion of common equityNoneAll key approvals receivedExpect ratings to be affirmed

I JPMORGAN CHASE & CO.


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WaMu provides unique opportunity to expand retail banking franchiseand generate attractive returns for JPMorgan Chase shareholders

Strategic Fit Greatly enhances retai l banking platform in attractive marketsCombined deposits of $911 billion and 5,410 branches at close

Expanding into attractive new markets (CA + FL)Increases market share in existing largest fast-growing markets (NY, TX, IL, AZ, CO, UT)

Financially Compelling Accretive immediately; should be substantially so in future

Asset write-downs reduce risk to volatility in future earningsAllows significant margin for error Opportunity to grow revenue and realize significant cost savings

Ability to bring expanded Chase products and services to WaMu branchesDrive efficiencies in branch network and back office

JPMorgan Chase maintains strong capital and liquidity positionsRetail deposits add to stable funding base

Ability to execute Proven capabili ties with success in Bank One/Chase and Bank of New York transactions Little overlap with Bear Stearns integration

JPMORGAN CHASE & CO. 2


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Leader in retail banking and deposit gatheringBranches Deposits ($bn)

Rank Institution Branches (#) Rank Institution1 Bank of America 6,138 (1) Pro forma JPMorgan Chase

(2) Pro forma JPMorgan Chase 5,410 1 Citi2 Wells Fargo 3,430 2 Bank of America3 Wachovia 3,348 3 JPMorgan Chase4 JPMorgan Chase 3,203 4 Wachovia5 U.S. Bancorp 2,649 5 Wells Fargo

Source: SNL FinancialNote: Branch data as of September 18, 2008; deposit data as of June 30, 2008

JPMORGAN CHASE &CO.

Deposits ($bn)$911

804785723448339

3


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Creates broader branch networkBranch map

Chase branches - 3,203* WaMu branches - 2,207 Branch overlap New markets

Source: SNL FinancialNote: Data as of September 18, 2008JPMORGAN CHASE& CO.

Total JPMorgan Chase-WaMu combined branches - 5,410 at close

4


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Adds branch presence in new markets# of branches

State Combined JPMorgan Chase Washington Mutual-New York 888 651 237Texas 722 469 253California 691 3 688Illinois 463 348 115Arizona 308 244 64Michigan 298 298Ohio 285 285Florida 274 13 261New Jersey 253 167 86Washington 188 1 187Indiana 185 185z Louisiana 162 162

I - Colorado 129 89 40:(I - Oregon 105 105I.J.JVl Wisconsin 77 77I.J.Jc:r: Other 382 211 171Lcr: Total 5,410 3,203 2,2070I - Source: SNL FinancialVlw Note: Branch data as of September 18, 2008>z

JPMORGAN CHASE&CO. 5


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Combined retail.franchise has leading market share in key statesAdjusted deposits in 10 key states ($bn)

$88.2 JPMorgan Chase Washington Mutual

New York California Texas illinois Arizona Michigan Washington Ohio Florida New Jersey

21.7%0.62.6%

Source: SNL Financial

312.2%4.04.8%

13.0%3.69.8%

9.0%0.73.1%

123.6%1.5

16.9%

210.8%0.42.1%

214.6%0.76.6%

47.6%0.32.6%

53.9%3.49.7%

Note: Deposit data as of June 30, 2007; excludes deposits greater than $500mm in a single branch; demographic data deposit-weighted by county12007-2012JPMORGAN CHASE & CO_

68.2%o.s2.9%

6


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Top 3 ranking in the country's largest MSAsSelect MSAs by Deposits ($ millions)


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Footprint covers 46% of expected population growth - up from 18%

Combined Chase- - - - - - - - - - - - - - - - " - - - - - ~ ~ - - - - " - - - -

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Integration plan: invest to improve franchise, realizeefficiencies and reduce risk

Integrate branch systemClose less than 10% of combined branchesOptimize staffing in the branches for right balance of sales specialists, bankers and support staffConvert Washington Mutual branches to Chase's platform; process virtually identical with prior Bankof New York and Bank One conversionsBring best sales and business practices to each

Leverage Washington Mutual branch footprint for growthIntroduce enhanced product offerings to promote greater cross-sellBuild out Business Banking (for small business clients)Build out Middle MarketBenefits Private Bank and Private Client Services

Consumer lendingRun-off existing home lending and sub-prime credit card portfoliosExit all non-bank branch retail lendingFuture originations to Chase standards

Integrate mortgage servicingIntegration plan generates top and bottom line growth

JPMORGAN CHASE & CO . 10


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Revenue growth: credit card and investment sales Branch network provides opportun ity to cross-selL more products, particuLarLy credit card and

investment sales:Credit card

In 2007, Chase produced 2x the per branch credit card production of WaMuAchieving this productivity from WaMu branches would generate an additional 500,000credit cards sold annually through the branches

Investment salesChase's %of retail bank househoLds that have an investment product is 2x greater thanWaMuChase's FinanciaL Advisors produce on average 60% more investment sales per yearAchieving Chase investment sales productivity and increasing number of Financial Advisorscould Lead to an addit ional $8-10B in sales annuaLLy through the branches

Credit card sales per branch per month - 2 00 7 Investment sales per branch per month - 2 00 7- WaMu - Chase 2x higher WaMu - Chase 3x higher

JPMORGAN CHASE&Co. 11


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Chase has a solid track record in enhancing branch productivityBank of New York branches - credit cards 1 Bank of New York branches - investment sales1

1.4x higher

1.0x

20.0x higher

1.Ox

2005 BNY 1H08 2005 BNY 1H08Note: 1H07 and 1HOB are averages of 1Q and 2Q'Based on average of comparable deposit size Chase branches in NY, NJ and CT

Chase successfully increased branch productivity for credit card andinvestment sales after the Bank of New York branch acquisition



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Branches in new markets create opportunity for Business andCommercial Banking

Business Banking Significant opportunity to expand Business Banking as WaMu had limited market penetration Chase has 5x WaMu's average Business Banking checking balances Chase has 40% more fee income per customer Plans include expanded product offering and bui ld out of business bankers/relationship

managersCommercial Banking

Retail branch presence provides the basis for a strong middle market franchise Washington Mutual's retail presence in select attractive markets combined with Chase's

proven leadership provides significant oppor tunity to enhance Chase's Middle Market business Over 5,000 Middle Market companies for Chase to pursue as customers in Los Angeles, San

Diego, San Francisco, Seattle, and Portland Incremental capabilities from Washington Mutual's multi-family lending business, a niche

product offering with a good risk profile Ability to offer Treasury Services products to new customer base

JPMORGAN CHASE &Co. 14


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Remaining life loss estimates and marksWashington Mutual Home Loan portfolio ($ millions)

Total Fair

Option ARMs ($8,189)Mortgage (3,376)HE Loans & Lines (12,565)Subprime (5,761)

Total home loan portfolio ($29,891)Other portfolios ($980)Total marks ($30,871)

Allowance for loan losses ($ millions)

WaMu Allowance fo r Loan Losses as of 6/30/08Transition Adjustment'

WaMu pro forma Allowance fo r Loan Losses

Remaining life loss estimatesas of 12131/2007

$11,8032,692

14,2527,502

$36,249

$8,456(4,877)- - - - " . ~ > ...- .$3,579

(%)20%

5234019%

Projected remaininglife losses as of Estimated

09/30/2008 balances as of$ 9/3012008

$10,346 $50,3002,183 51,100

11,739 59,5006,438 15,100

$30,706 $176,000

WaMu's credi t impaired loans will be recorded at fair value at the acquisition date. Ini tia ladjustments to fair value will be recognized through purchase accounting. Subsequent adjustmentsto be recognized through income statement. The allowance for loan losses associated with theseloans will not be carried over to the combined company.

For non-credit impaired loans, the allowance for loan losses is transferred over to the combinedcompany and subject to conforming reserve adjustments. These adjustments will be recognized inthe consolidated income statement

1 Transition adjustment represents: release of allowance on credit Impaired loans (PM) and conforming ALL adjustments (Income statement)JPMORGAN CHASE &CO. 15


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Home lending loss sensitivities($ billions)___________________________________________~ ~ ~ e n ! _ ~ ~ ~ J m a _ t e _ ~ ____________ ~ ~ ~ p e ~ ~ ~ e ~ _ ~ ! ~ ~ ________S e ~ ~ ~ ~ _ r e c e s ~ ~ ~ _ ~ _

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Current to trough HPA 1CaliforniaFloridaUSPeak to trough HPA 1CaliforniaFloridaUSUnemploymentRemaining life losses fromDecember 31, 2007

r- 1 Home price appreciationVIW>Z JPMORGAN CHASE &Co.

(10%)(16)(8)

(44%)(44)(25)

7.0%$36

(14%)(21)(11 )

(48%)(49)(28)7.5%$42

(24%)(36)(20)

(58%)(64)(37)8.0%$54

16


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Capital impact from transaction before capital raise

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Tier 1 capital impact ($ billions)

Tangible assets assumed1Liabilities assumed1Net assets2Loan marksReversal of loan loss reserveOther PAA 3

Adjusted net asset valueConsideration

Pro forma capital impactConforming loan loss reserve

Pro forma capital impact after conforming loan loss reserve

a:: 1 At Washington Mutual carrying values

$296265$31(31)8(6)$2(2)$0(1 )

($1 )

o Z Excludes REIT preferred, subordinated debt and senior debt from Washington Mutual's banks, and the elimination of the deferred tax assets of Washington Mutual's banksf- l Other includes restructuring charge, writeoff of PP&E, and other Tier 1 adjustmentsIf)w>Z

JPMORGAN CHASE& CO . 17


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Capital ratio analysis - includes expected $8bn capital raiseCapital over time

Pro forma assets ( res)Tota l assetsTangible assetsRWAAverage assets for leverage ratio

Pro forma capital (res)Tangible common equit yTier 1 capitalTotal capital

Pro forma capita l ratiosTCE/TAleverageTier 1 capitalTotal capitalTCE/MRWA

6/30/08JPMorgan Chase

$1,7761,7271,0801,536

$7999145

4.6%6.49.2

13.46.8

Source: Company filings, FactSet, IIS/E/S, Equity research, JPMorgan Chase and Washington Mutual estimatesNote: JPMorgan pro forma for S1.8bn issuance of ORO Preferred in August 2008 and S8.0bn common raiseJPMORGAN CHASE &CO.

Estimated 9/30/2008JPMorgan Chase pro forma

$2,0502,0001,3001,550

$85107156+/-4.3%6.98.3

12.06.4

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Illustrative income statement impact$ billions

2009 2010 2011JPMorgan Chase GAAP earnings consensus $11.7 $15.8 $16.7JPMorgan Chase GAAP EPS consensus $3.29 $4.41 $4.67Pro forma contribution from Washington Mutual $2.4 $3.0 $3.4Pro forma GAAP net income $14.2 $18.8 $20.1Pro forma GAAP EPS $3.79 $5.01 $5.37

!EPS accretion/(dllutton) ($) $0.50 $0.60 $0.70 1IEPS accretion/(dUution) (%) 15% 14% 15% IlEarnings accretlon /(dtlution) ($bn) $1.9 $2.2 $2.6 I1.__ , ~ _ ~ ~ _____ ~ ~ ~ , __ . ~ ~ _ . _ ~ . ~ . , ~ _ ~ _ ~ __ .__ _ _"_" ____ ~ , _ > ____ ___ " _ , ~ . __ __ ~ _ , , . __ ~ ~ " __ _ __ . _ ~ __ _ _ _ _ , o _ ~ _ . ____ __ . ~ _ < _ ~ ~ ___ __ __ " ~ , ~ __ _,, ' ~ ~ ~ ____' _ ~ _ ' _ ~ . _ " _ w _ . ~ _ ~ ~ ___ , . , , ~ l

Substantially improved earnings creates margin of error for additional credit losses

Note: Washington Mutual contribution based on JPMorgan Chase management estimates

JPMORGAN CHASE &CO. 19


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Illustrative capital generation from Washington Mutual franchise$ billions

Operating income (after-tax)Capital from balance sheet reduction

2009$2.42.0

2010$3.01.1

2011$3.40.5

I!'ashington Mutual total excess capital $4.4 $4.1 $3.9Iwashington Mutual total cumulative excess capital $4.4 $8.5 $12.4

Washington Mutual assets $231.2 $211.5 $200.2

Note: Washington Mutual contribution based on JPMorgan Chase management estimates



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JPMorgan Chase 3Q08 earnings outlookNote that the below 3Q.OB outlook is necessarily preliminary pending completion of the Firm's third fiscal quarter. Accordinglythe info rmation remains subject to trading results fo r several remaining days, changes in JPM credit spreads, allowanceadditions based on final credit loss data, quarter-end accounting adjustments, and other factors. In additjon, the overalleconomy and the capital markets remain highly uncertain. For more information, see "Forward-Iooking disclosures" on page 22 Investment Bank

QTD trading results positive despite highly volatile conditionsIncludes markdowns of $3.0bn to $3.5bn +1- on mortgage and leveraged loansSignificant reduction in key risk exposureBenefit of credit spread widening $1bn +1-LehmaniAIG exposure - risk remaining but minimal cost expected in third quarter

Expect APB 23 benefit firmwide of $700mm+ (mostly in Investment Bank)Addition to allowance for credit losses of $400mm + -Inelusive of al l the above, expect Investment Bank to be profitable in the quarter

Retai l Financia l Services net charge-ofts continue to trend higher as previously disclosed; likely addition to allowance for loan lossesfor the subprime and prime mortgage portfolios of $600mm+ (some of which relates to prime mortgage in Corporate)

Card Services net charge-ofts performing as previously diselosed in range of 5% + Other businesses (C8, TSS, AM) on track versus prior outlook Corporate results include:

$1.2bn pretax write-down re lated to preferred equity Interests in FRE and FNMEstimated auction-rate securities buyback charge of approximately $400mm +/ - (pretax)Increased credit costs related to prime mortgage portfolio

Washington Mutual transaction will have some income statement accounting impact in 3Q08Expect no extraordinary gainApproximately $2bn addition to allowance for loan losses (conforming accounting booked above the line)

JPMORGAN CHASE&Co. 21


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Forward-Looking Disclosure: This presentation contains forward-looking statements within the meaning of thePrivate Securities Lit igation Reform Act of 1995. In particular, the earnings information presented on page 21is necessarily preliminary pending completion of the Firm's third fiscal quarter on September 30, 2008. Suchinformation also does not reflect the impact on the Firm's earnings or credit information as a result of theacquisition of the assets and liabilities of Washington Mutua l's banks. Al l forward- looking statements includedin this presentation are based upon the current beliefs and expectations of JPMorgan Chase's managementand are subject to significant risks and uncertainties. Actual results may differ from those set forth in theforward- looking statements. Factors that could cause JPMorgan Chase's actual results to differ materiallyfrom those described in the forward-looking statements include: changes in revenue due to volatility in thefinancial and trading markets; additional reserves to the allowance fo r credit losses based on final credit lossdata; increased expenses due to final accrual information; normal quarter-end accounting adjustments;negative economic conditions that adversely affect housing prices, the job market, consumer confidence andspending habits and the economy in general; changes in interest rates; estimates used in determining the fairvalue of certain of our assets may be imprecise resulting in significant changes in valuation; changes in theregulation of financial services companies, government-sponsored enterprises, mortgage originators andservicers, hedge funds and credit card lenders; changes in the regulation of the products and services thatJPMorgan Chase offers; and changes in the reputation of , or expectations regarding, the financial servicesindustry in general or JPMorgan Chase in particular or with respect to practices of , and products offered by,financial institutions in general or JPMorgan Chase in particular. Additional factors that may cause actualresults to differ materially than those set forth in the forward-looking statements can be found in JPMorganChase's Quarterly Reports on Form 10-Q fo r the quarters ended March 31, 2008 and June 30, 2008, AnnualReport on Form 10-K fo r the year ended December 31 , 2007 and Current Reports on Form 8-K fo r eventsoccurring on or after the date hereof, filed with the Securities and Exchange Commission and available onJPMorgan Chase's website (www.jpmorganchase.com) and on the Securities and Exchange Commission'swebsite (www.sec.gov) to which reference is hereby made. JPMorgan Chase does not undertake to update theforward-looking statements to reflect the impact of circumstances or events that may arise after the date ofthe forward-looking statements.

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