Microsoft, others seek to get paid for sales to failed bank

Microsoft and others have filed motions indicating they hope to be paid for products or services supplied to failed bank Washington Mutual.

Microsoft got in line with several other organizations that are taking steps to get paid for products and services provided to Washington Mutual, the largest bank to fail in U.S. history.

On Tuesday, Microsoft filed a document with the Delaware bankruptcy court handling the WaMu case asking to be sent copies of all proceedings in the case.

"Microsoft filed a notice of appearance because we have existing contracts for software licenses and consulting services with Washington Mutual and we want to make sure those contracts are properly administered through the bankruptcy process," said David Bowermaster, a Microsoft spokesman, in an e-mailed statement.

Microsoft would not describe the size or duration of its contracts with WaMu. The bank is a beta tester and early user of its products, and last year a WaMu executive joined Microsoft Chairman Bill Gates on stage at a launch event for Windows Vista, Office 2007 and Exchange 2007.

Microsoft isn't alone in its efforts. On Tuesday Siemens filed a motion asking that JP Morgan, which is taking over WaMu, either reject or assume an IT services contract it has with the bank, worth US$5 million to $6 million each month. Siemens said it had supplied about $10 million worth of IT services to WaMu that have not been paid for. Siemens has about 400 employees and contractors providing services to the bank, it said.

And Tata Consultancy Services, the Indian outsourcing and IT services company, filed a motion similar to Microsoft's asking to be kept apprised of proceedings.

Government regulators seized WaMu in late September and let other companies bid to take over the bank. JP Morgan had the winning bid. The economic crisis in the U.S., driven in part by a housing slump, hit WaMu particularly hard because it was one of the country's biggest providers of home mortgages, including risky loans.

Amid the troubles in the financial sector, many analysts say that the surviving financial organizations will still need to rely heavily on technology, so IT vendors may not be hit too hard by banking failures. While the wider economic meltdown is sure to slow IT spending overall, many analysts still say that they expect most of the big vendors to be able to weather the storm.

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Nancy Gohring

IDG News Service
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