Judge approves settlement in WaMu bankruptcy Investors in Washington Mutual will drop a lawsuit against the failed bank under a settlement approved by a Delaware judge. Under the agreement approved Wednesday, investors will get a general unsecured claim of $9 million, a subordinated claim of $10 million and about 9 percent of the reorganized common stock in the bank if its latest reorganization plan is approved. The investors argued that they held warrants entitling them to cash recoveries if Washington Mutual won a lawsuit filed against the federal government 17 years ago, and thus held debt claims against WMI. But the judge ruled last month that the warrants allowed only an equity interest in Washington Mutual Inc, seriously reducing the investors' potential recovery in bankruptcy. Washington Mutual was the largest bank to fail in U.S. history.