Is JPMorgan (NYSE: JPM) trying to wiggle out of its Washington Mutual obligations? That's how some critics see it. Recall that the bank, led by hard-charging CEO Jamie Dimon, bought the Seattle thrift for $2 billion in a deal brokered by the FDIC. At the time some thought it was a coup. But the costs of absorbing WaMu are still a bit fuzzy, and a legal battles have been raging about who ought to cover the thrift's liabilities.

This specific dispute--there are others--was sparked by a bondholder suit that targeted the FDIC and JPMorgan to pay $6 billion to $10 billion in damages for violating contracts related to bonds that soured. The dispute between the FDIC and J.P. Morgan "hinges on the interpretation of one section in the WaMu sale agreement to J.P. Morgan on Sept. 25, 2008," reports the Washington Post. "According to the document, J.P. Morgan agreed to 'pay, perform, and discharge all of the liabilities of the Failed Bank which are reflected on the Books and Records of the Failed Bank as of Bank Closing.' The liabilities from mortgage security lawsuits weren't listed on those 'Books and Records,' according to J.P. Morgan." Eventually, a federal judge in the District will decide whether the bank's claim has merits."

This is  a tricky one. The FDIC was dashing to prevent a meltdown of the banking system and perhaps had to rush the deal. Whether this will be taken into account by a judge remains unclear. But it's possible that taxpayers could end up on the hook for billions. The bank thinks the FDIC is accountable for costs related to soured bonds backed by GSEs, should it come to that.

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