The bankruptcy trustee of failed IndyMac Inc. has agreed to settle a fight over tax refunds with the Federal Deposit Insurance Corp. ending five years of litigation, the Wall Street Journal reported today. The former parent of IndyMac Bank gets to collect about $58.6 million in state and federal tax refunds, while the FDIC gets to stand in line with the rest of the parent company’s unsecured creditors and collect its share, according to papers filed on Wednesday with the U.S. Bankruptcy Court in Los Angeles. Set for court review Dec. 3, the pact is designed to speed a payday for investors that took a hit when the California mortgage lender shut its doors in 2008 after worried depositors withdrew their funds. While it doesn’t settle all of the disputes between IndyMac’s parent and the federal agency, the settlement does wrap up the most significant points of contention, such as the FDIC’s insistence it is owed $5 billion on a top-priority basis. In cases around the country, the FDIC has been fighting bank holding companies over who gets to collect tax refunds tied to the losses rung up when the housing market collapsed in 2007.
