UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended June 30, 2004


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________.

Commission File Number 0-32301

Bank United Corp. Litigation Contingent
Payment Rights Trust

(Exact name of registrant as specified in its charter)


Delaware		76-6168223

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3200 Southwest Freeway, Suite 1001 Houston, Texas		77027

(Address of principal executive offices)		(Zip code)

(713) 543-6958

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of July 29, 2004, there were 38,840,042 Contingent Payment Rights Certificates (no par value) outstanding.

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TABLE OF CONTENTS


PART I FINANCIAL INFORMATION
	Item 1. Financial Statements
	1. Summary of Significant Accounting Policies
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Not Applicable
	Item 4. Controls and Procedures
PART II OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
INDEX TO EXHIBITS
Certification pursuant to Section 302 of Jonathon K. Heffron
Certification pursuant to Section 302 of Salvatore A. Ranieri
Certification of Periodic Report by Jonathon K. Heffron
Certification of Periodic Report by Salvatore A. Ranieri

BANK UNITED CORP. LITIGATION CONTINGENT PAYMENT RIGHTS TRUST

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

BANK UNITED CORP. LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
STATEMENT OF FINANCIAL CONDITION
(dollars in thousands)


	June 30, 2004			December 31, 2003
	(unaudited)
ASSETS
Cash (note 1)	$	29		$	142
Accounts receivable (note 2)		2			6
Prepaid expenses		11			1

Total assets	$	42		$	149

LIABILITIES AND CERTIFICATEHOLDERS’ DEFICIT
Expense fund advances (note 4)	$	5,613		$	5,492
Other liabilities (notes 4 and 7)		953			747

Total liabilities		6,566			6,239
Certificateholders’ deficit (note 5)
Certificates, no par value, 38,919,884 authorized, 38,840,042 issued and outstanding in 2004 and 38,814,022 in 2003		—			—
Accumulated deficit		(6,524	)		(6,090	)

Total certificateholders’ deficit		(6,524	)		(6,090	)

Total liabilities and certificateholders’ deficit	$	42		$	149

See accompanying notes to financial statements.

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BANK UNITED CORP. LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)


	Three months ended			Three months ended			Six months ended			Six months ended
	June 30, 2004			June 30, 2003			June 30, 2004			June 30, 2003
REVENUE	$	—		$	—		$	—		$	—

EXPENSES
Litigation trustee fees (note 3)		—			(250	)		—			(500	)
Licenses, permits and filing fees		(3	)		(4	)		(7	)		(7	)
Legal expense (note 2)		(16	)		(151	)		(109	)		(176	)
Accounting and auditing fees		(33	)		(21	)		(69	)		(38	)
Trust administration fees		(6	)		(6	)		(12	)		(12	)
Financial printing expense		(5	)		(3	)		(6	)		(3	)
Interest expense (note 4)		(101	)		(82	)		(200	)		(161	)
Office and other		(12	)		(18	)		(31	)		(29	)

		(176	)		(535	)		(434	)		(926	)

NET LOSS	$	(176	)	$	(535	)	$	(434	)	$	(926	)

NET LOSS PER CERTIFICATE	$	—		$	(0.01	)	$	(0.01	)	$	(0.02	)

See accompanying notes to financial statements.

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BANK UNITED CORP. LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
STATEMENTS OF CHANGES IN CERTIFICATEHOLDERS’ DEFICIT
(unaudited)
(dollars in thousands)


								Total
	Number of				Accumulated			Certificateholders'
	Certificates		Certificates		Deficit			Deficit
Balance at December 31, 2002		38,716,528	$	—	$	(4,324	)	$	(4,324	)
Shares issued		97,994		—		—			—
Net loss		—		—		(926	)		(926	)

Balance at June 30, 2003		38,814,522	$	—	$	(5,250	)	$	(5,250	)

Balance at December 31, 2003		38,814,022	$	—	$	(6,090	)	$	(6,090	)
Shares issued		26,020		—		—			—
Net loss		—		—		(434	)		(434	)

Balance at June 30, 2004		38,840,042	$	—	$	(6,524	)	$	(6,524	)

See accompanying notes to financial statements.

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BANK UNITED CORP. LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
STATEMENT OF CASH FLOWS
(unaudited)
(in thousands)


	Six months ended			Six months ended
	June 30, 2004			June 30, 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(434	)	$	(926	)
Adjustments to reconcile net loss to cash used in operating activities
Increase in other assets		(6	)		(8	)
Increase in other liabilities		206			108

Total adjustments		200			100

Net cash used in operating activities		(234	)		(826	)

CASH FLOWS FROM FINANCING ACTIVITIES
Expense fund advances		121			198

Net decrease in cash		(113	)		(628	)
CASH AT BEGINNING OF PERIOD		142			631

CASH AT END OF PERIOD	$	29		$	3

See accompanying notes to financial statements.

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BANK UNITED CORP. LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Notes to Financial Statements

1. Summary of Significant Accounting Policies

Principles of presentation

The Bank United Corp. Litigation Contingent Payment Rights Trust (the “CPR Trust”) is a statutory business trust created under Delaware law on November 2, 2000. Bank United Corp. created the CPR Trust in connection with its merger with Washington Mutual, Inc., which was completed on February 9, 2001. The assets of the CPR Trust consist primarily of the right to receive a portion of any proceeds received by Washington Mutual, Inc. and Washington Mutual Bank, FA (as successors to Bank United Corp. and Bank United) in any judgment or settlement of the forbearance litigation (the “Litigation”) against the United States described below in note 2. As indicated in note 2, on April 9, 2004, the plaintiffs timely filed a Petition for a Writ of Certiorari (“Petition”) in the Supreme Court, requesting review of the Appeals Court Decision. The Supreme Court is not expected to rule on the Petition until October 2004. After the Litigation has been resolved, the Trust will be terminated and cease to exist.

The unaudited financial statements of the CPR Trust included herein reflect all adjustments, consisting only of recurring normal adjustments, which are, in the opinion of the Litigation Trustees, necessary to present fairly the results for the interim period indicated. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the SEC. The results of operations for the six months ended June 30, 2004, are not necessarily indicative of the results of operations to be expected for the remainder of the year.

These financial statements should be read in conjunction with the financial statements and notes thereto included in the CPR Trust’s annual report on Form 10-K for the year ended December 31, 2003.

Cash

Cash balances are held in noninterest earning accounts at Washington Mutual Bank, FA.

Fair Value of Financial Instruments

All of the CPR Trust’s financial instruments are carried at fair value or amounts approximating fair value due to the relative short-term to maturity.

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Use of Estimates

The Litigation Trustees have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of expenses in order to prepare these financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.

Net loss per certificate

The net loss per certificate was calculated by dividing the net loss by the weighted average number of certificates outstanding (38,840,042 and 38,834,304 average certificates outstanding for the three and six months ended June 30, 2004, and 38,775,226 and 38,746,039 average certificates outstanding for the three and six months ended June 30, 2003). The only potentially dilutive effect, if the CPR Trust had earnings, would result from the exercise of the remaining outstanding stock options. However, because the CPR Trust incurred a net loss, no dilutive effect was considered in the net loss per certificate calculation.

Federal income taxes

The CPR Trust is treated as a grantor trust for federal income tax purposes. A grantor trust is not a separate taxable entity. Income resulting from payments received by the CPR Trust is required to be reported for federal income tax purposes by certificateholders. The Washington Mutual, Inc. consolidated group will recognize expenses incurred by the CPR Trust for federal income tax purposes. Therefore, no effect has been provided for federal income taxes.

2. The Litigation

On July 25, 1995, Bank United Corp., Bank United, and their then affiliate, Hyperion Partners L.P., filed suit against the United States in the U.S. Court of Federal Claims for failure of the United States to adhere to its agreement to waive or forbear from enforcing certain regulatory provisions concerning capital requirements, liquidity requirements, accounting requirements, and other matters. The plaintiffs sought damages in excess of $550 million. The government argued that the damages to plaintiffs as a result of the breach, if any, were speculative and approached zero.

In March 1999, the U.S. Court of Federal Claims granted Bank United Corp.’s motion for summary judgment on the issue of liability, holding the United States liable for all claims. In August 1999, the court denied a motion for summary judgment filed by the United States on the issue of lost profit damages. The case proceeded to trial on the amount of damages in September 1999, and the taking of evidence by the court concluded in October 1999. The parties submitted post-trial briefs followed by closing argument in February 2000.

In October 2001, the court ruled that the plaintiffs were not entitled to any lost profits, but were entitled to recover mitigation costs of $8,826,783 .

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In January 2002, the plaintiffs filed motions with the court asking it to (i) amend certain findings in its October 29, 2001 opinion and amend the judgment of January 8, 2002, (ii) reopen the record to receive additional documentary evidence, and (iii) reopen the record to admit additional evidence omitted from the trial record. In February 2002, the federal government filed its opposition to these motions.

In February and March 2002, the plaintiffs filed their Bill of Costs, seeking $437,978 in costs from the government. In February 2002, the government filed an opposition to the plaintiffs’ Bill of Costs, requesting the court deny the plaintiffs any award of costs. In March 2004, the U.S. Court of Federal Claims rendered its decision on the plaintiffs’ Bill of Costs. The U.S. Court of Federal Claims taxed costs against the federal government in favor of the plaintiffs in the amount of $141,848.

On April 16, 2002, the court heard oral arguments on the January 2002 motions. Following oral arguments, the court denied plaintiffs’ motions in their entirety.

On June 14, 2002, the plaintiffs filed a Notice of Appeal to the U.S. Court of Appeals for the Federal Circuit (“Appeals Court”), appealing any and all rulings, orders, and judgments rendered by the court to date against the plaintiffs. These adverse rulings include the October 29, 2001 ruling that the plaintiffs were not entitled to any lost profits damages and the April 16, 2002 denial of certain motions made by the plaintiffs.

On June 26, 2002, the government filed a Notice of Appeal to the Appeals Court, appealing the final judgment of the U.S. Court of Federal Claims, including (1) the court’s granting summary judgment for the plaintiffs on the issue of liability against the government, (2) the court’s refusal to deny modification of that decision, and (3) the court’s October 29, 2001 decision.

Beginning in August 2002 through November 2002, the plaintiffs and the government filed their opening, reply, and opposing briefs with the Appeals Court.

In appellate court briefs, the government stated that it was not challenging the trial court’s award to plaintiffs of $4,884,283, the cost of mitigating the breach of the subordinated debt provision of the parties’ contract.

Oral argument took place on May 7, 2003 before a panel of judges of the Appeals Court comprised of Chief Judge Haldane R. Mayer, Judge Sharon Prost, and Judge Timothy B. Dyk. The case was submitted for decision following oral argument.

On May 19, 2003, the plaintiffs filed a Motion for Leave to File a Post-Argument Clarification and their Post-Argument Clarification. The Appeals Court denied the motion by order dated May 28, 2003. No reasons were given for the denial.

On September 22, 2003, the Appeals Court rendered its decision on the appeals. In a nonprecedential opinion, written by Judge Prost, the trial court decision was affirmed-in-part and reversed-in-part. In summary, the Appeals Court affirmed the trial court’s rulings except for granting that part of defendant’s cross appeal seeking reduction of the award to plaintiffs by $3,942,500. Thus, plaintiffs’ damages award was reduced from $8,826,783 to $4,884,283.

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On November 5, 2003, the plaintiffs’ filed a Petition for Rehearing in the Appeals Court, seeking a rehearing by the panel and a rehearing by the full Appeals Court sitting en banc. Plaintiffs sought a rehearing on that part of the Appeals Court decision regarding the amount of expectancy damages they are entitled to as a result of their mitigation efforts. Plaintiffs did not seek a rehearing of the Appeals Court’s decision denying plaintiffs’ lost profits and cost of substitute capital claims. On December 12, 2003, the Appeals Court denied the plaintiffs’ Petition for Rehearing. Thus, the Appeals Court has determined a final award of $4,884,283 to the plaintiffs.

Following the Appeals Court decision, plaintiffs retained new counsel experienced in matters before the Supreme Court of the United States (“Supreme Court”). On April 9, 2004, the plaintiffs timely filed a Petition for a Writ of Certiorari (“Petition”) in the Supreme Court, requesting review of the Appeals Court decision. On July 9, 2004, the government timely filed its brief in opposition to the Petition. On July 22, 2004, plaintiffs timely filed a reply brief to the government’s brief in opposition. According to the Supreme Court’s automated docket system, the case has been distributed to the Justices for Conference on September 27, 2004. The Supreme Court is not expected to rule on the Petition until October 2004.

While the plaintiffs strongly believe in the validity and correctness of the points made in their Petition, there can be no assurances that the Supreme Court will grant review of the Appeals Court decision. The Supreme Court has absolute discretion to grant or deny review in virtually all cases in which petitions are filed. In this regard, the Supreme Court grants review in fewer than 100 cases per year, although approximately 8,200 petitions are filed during each annual term of the Supreme Court. Moreover, even if the Supreme Court were to accept review, it could still allow the Appeals Court judgement to stand.

The amount owed by the CPR Trust to Washington Mutual, Inc. at June 30, 2004 for expense fund advances exceeds the final award from the Appeals Court of $4,884,283 and costs in the amount of $141,848 taxed against the federal government in favor of the plaintiffs by the Claims Court. If the Litigation were to terminate because of a decision by the Supreme Court not to accept review of the case or a decision to affirm the Appeals Court judgment, there would be no recovery to the CPR certificateholders because the CPR Trust’s 85% share of the total judgment awarded by the Appeals Court (plus the CPR Trust’s 85% share of the $141,848 in total costs taxed against the federal government by the U.S. Court of Federal Claims) is less than the amount that is owed by the CPR Trust to Washington Mutual, Inc.

The terms of the July 1996 recovery agreement entered into by Bank United Corp., Bank United, and Hyperion Partners L.P., entitle Washington Mutual, Inc. and Washington Mutual Bank, FA, as successors to Bank United Corp. and Bank United, respectively, to 85% of any recovery in connection with the Litigation. Hyperion Partners L.P. is entitled to the remaining 15%. The recovery agreement further provides for Hyperion Partners L.P. to share in 15% of the expenses of the Litigation (primarily attorney fees and costs). At June 30, 2004 and December 31, 2003, the CPR Trust had outstanding receivables from Hyperion Partners L.P. totaling $1,919 and $3,357,

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which were current as to payment terms.

3. Litigation trustee fees

The CPR Trust and the Litigation are managed by the two Litigation Trustees who have knowledge of the facts underlying the Litigation and who have previously served as general counsel to Bank United Corp. or its predecessor entities. In turn, the Litigation Trustees each received a $500,000 fee per year, for three years, and 291,899 CPR Certificates upon the formation of the CPR Trust. The Litigation Trustees have been paid all of their compensation payments as of December 31, 2003. If either of the Litigation Trustees were to resign his position prior to the termination of the Litigation, he would forfeit the 291,899 CPR Certificates awarded to him.

4. Expense fund advances

The CPR Trust has no revenues. The CPR Trust’s only source of funding for payment of expenses and operations is Washington Mutual, Inc.’s obligation under the Commitment Agreement, dated as of February 8, 2001, by and among Bank United Corp. (which subsequently became Washington Mutual, Inc.), the CPR Trust, and the Payment Trust (the “Commitment Agreement”). Washington Mutual, Inc. is obligated to advance amounts to pay expenses of the CPR Trust, including expenses of the Litigation, fees and expenses of the Litigation Trustees, and all administrative expenses. The maximum amount that Washington Mutual, Inc. is obligated to pay is $10 million, unless additional court proceedings are necessary, in which case Washington Mutual, Inc. is obligated to pay an additional $3 million. Advances funded by Washington Mutual, Inc. will be reimbursed to Washington Mutual, Inc. from any proceeds of the Litigation, before the payment of any amounts to the holders of CPR Certificates. Based on discussions with counsel to the Litigation and certain other factors, the Litigation Trustees believe that there are sufficient funds available to the CPR Trust from Washington Mutual, Inc. to permit the trust to fund its portion of the Litigation expenses, as well as administrative and other expenses of the trust.

The expense fund advances accrue interest payable to Washington Mutual, Inc. at varying rates of interest. Outstanding advance balances up to $5 million accrue interest at 7% per annum, advance balances exceeding $5 million but less than $10 million accrue interest at 10% per annum, and advance balances exceeding $10 million accrue interest at 15% per annum. Interest expense of $101,671 and $200,485 was incurred during the three and six months ended June 30, 2004, and $82,246 and $160,499 was incurred during the three and six months ended June 30, 2003. At June 30, 2004 and December 31, 2003, accrued interest payable due to Washington Mutual, Inc. was $860,981 and $660,496, respectively, and included in other liabilities on the statements of financial condition. Interest is not due to Washington Mutual, Inc. until there is a recovery, if any, in the Litigation.

The CPR Trust may issue additional CPR Certificates to raise funds to pay expenses and is authorized to borrow additional funds for the purpose of funding its expenses, subject

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to certain limitations. If the CPR Trust accrues expenses in excess of the Washington Mutual, Inc. funding obligations, such amounts will be deducted from the amounts payable to the holders of CPR Certificates.

5. Certificateholders’ deficit

At June 30, 2004 and December 31, 2003, the certificateholders’ deficit consists of the accumulated deficit from the operations of the CPR Trust. The CPR Certificates have no stated or par value for financial statement purposes.

In connection with the Washington Mutual, Inc. merger, Bank United Corp. also undertook a legal reorganization (the “Reorganization”), whereby each share of Bank United Corp. common stock outstanding immediately prior to the Reorganization was converted into one new share of Bank United Corp. common stock and the right to receive one CPR Certificate. Similarly, options to purchase Bank United Corp. common stock outstanding at that time, as well as the Bank United Corp. 8% Corporate Premium Income Equity Securities (which subsequently became the Washington Mutual, Inc. 8% Corporate Premium Income Equity Securities or WM PIES) outstanding at that time were adjusted proportionately for purposes of receiving the appropriate number of CPR Certificates. In addition, an aggregate of 583,798 additional CPR Certificates were authorized to be issued to the Litigation Trustees.

At June 30, 2004, 38,840,042 CPR Certificates had been issued and were outstanding as follows: 32,743,289 CPR Certificates in respect of shares of Bank United Corp. common stock outstanding upon the Reorganization, 3,286,972 CPR Certificates in respect of Bank United Corp. stock options outstanding upon Reorganization, 2,225,983 CPR Certificates in respect of the WM PIES and 583,798 CPR Certificates issued to the Litigation Trustees. At June 30, 2004, 79,842 CPR Certificates had not been issued relating to unexercised Bank United Corp. stock options.

6. Payment to certificateholders

Any proceeds received by Washington Mutual, Inc. or Washington Mutual Bank, FA from the Litigation will be reduced for certain reimbursable items and increased for certain tax benefits realized by Washington Mutual, Inc., as described in the CPR Trust prospectus, prior to remitting the balance to the Bank United Corp. Payment Rights Trust and ultimately, subject to certain adjustments, to the CPR Trust. Within 60 days of receipt of the proceeds, the CPR Trust shall pay the certificateholders the payment amount, which consists of the proceeds from the payment trust less the amount held back to pay any of its accrued but unpaid expenses. In addition, the amount payable to the certificateholders may be reduced by $1.0 million or such greater amount as the Litigation Trustees reasonably determine to be necessary to pay all additional expenses and claims of the CPR Trust that may arise subsequent to this payment and to satisfy the CPR Trust’s indemnification obligations. Any retained amounts will be retained for a period of one year or longer as reasonably determined by the Litigation Trustees. The CPR Trust will pay any remaining portion of the retained amounts to the certificateholders within 90 days of the expiration of the applicable retention period.

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Each CPR Certificate will entitle the holder to receive a fraction (equal to one divided by the total number of CPR Certificates outstanding) of the total amount payable to CPR certificateholders.

7. Other liabilities

At June 30, 2004, other liabilities is principally comprised of various accrued expenses including interest costs, accounting and auditing fees, and legal fees.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The CPR Trust is a statutory business trust created under Delaware law on November 2, 2000. Bank United Corp. created the CPR Trust in connection with its merger, which was completed on February 9, 2001, with and into Washington Mutual, Inc. The assets of the CPR Trust consist primarily of the right to receive a portion of any proceeds received by Washington Mutual, Inc. (as successor to Bank United Corp.) and by Washington Mutual Bank, FA (as successor to Bank United) in any judgment or settlement in the forbearance litigation (the “Litigation”) against the United States described below under “The Litigation”. The Registration Statement on Form S-4 with respect to the CPR Certificates referred to in this document was filed by the CPR Trust with, and declared effective by, the Securities and Exchange Commission (the “SEC”) on January 9, 2001 (SEC File Number 333-49302) (the “Prospectus”).

The CPR Trust has no business operations. The CPR Trust exists to manage the prosecution of the Litigation and to take certain related actions. Because of the nature of the CPR Trust pursuant to the Declaration of Trust creating the CPR Trust, there are no employees, no board of directors, and no board audit committee. The two Litigation Trustees manage the Litigation and, together with the institutional trustee, Wachovia Bank, N.A., perform certain trust functions. The financial statements of the CPR Trust are prepared by an independent contract accountant with the assistance of the Litigation Trustees, and the annual financial statements are audited by the independent accounting firm of KPMG LLP. The Litigation Trustees are responsible for establishing and maintaining disclosure controls and procedures and internal controls.

As a result of a reorganization, which was effected by means of a merger of Bank United Corp. with and into one of its wholly owned subsidiaries (the “Reorganization”), each share of Bank United Corp. common stock outstanding immediately prior to the Reorganization was converted into one new share of Bank United Corp. common stock and the right to receive one CPR Certificate, and appropriate and proportionate adjustments were made to options to purchase shares of Bank United Corp. common stock outstanding at that time and to Bank United Corp. 8% Corporate Premium Income Equity Securities (which subsequently became the Washington Mutual, Inc. 8% Corporate Premium Income Equity Securities or WM PIES) outstanding at that time. In addition, an aggregate of 583,798 additional CPR Certificates were authorized to be issued to the Litigation Trustees. The Reorganization occurred immediately prior to the merger with Washington Mutual, Inc.

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respect of the WM PIES and 583,798 CPR Certificates issued to the Litigation Trustees. At June 30, 2004, 79,842 CPR Certificates had not been issued relating to unexercised Bank United Corp. stock options.

Bank United Corp. also created the Bank United Corp. Payment Rights Trust (the “Payment Trust”) in connection with the Washington Mutual, Inc. merger to manage the payment of any proceeds from Washington Mutual, Inc. to the CPR Trust. The Payment Trust will receive the applicable portion of any recovery in the Litigation from Washington Mutual, Inc. The Payment Trust will make payments to the CPR Trust from time to time following the receipt of any recovery amount, after certain adjustments described in the Prospectus.

The payment rights of the trusts are governed by the Declaration of Trust of the CPR Trust, the Declaration of Trust of the Payment Trust and the Commitment Agreement, dated as of February 8, 2001, by and among Bank United Corp. (which subsequently became Washington Mutual, Inc.), the CPR Trust, and the Payment Trust (the “Commitment Agreement”).

Under the Commitment Agreement, Washington Mutual, Inc. is obligated to pay to the Payment Trust from time to time an amount equal to the Commitment Amount plus interest less taxes on that interest.

The “Commitment Amount” is equal to:

•		all cash and non-cash proceeds actually received by Washington Mutual, Inc. and its affiliates under a final, nonappealable judgment or a final settlement of the Litigation,

•		less reimbursements to Washington Mutual, Inc.,

•		plus any tax benefits to Washington Mutual, Inc., based on assumptions specified in the Commitment Agreement as to the deductibility of expenses.

The reimbursements that Washington Mutual, Inc. may subtract from the Litigation proceeds are as follows:

•		amounts paid by Washington Mutual, Inc. to the expense fund described below, plus interest,

•		Washington Mutual, Inc.’s income tax liability resulting from the receipt of the Litigation proceeds, based on assumptions specified in the Commitment Agreement as to the taxability of such proceeds,

•		damages actually suffered by Washington Mutual, Inc. and related parties as a result of any matter whatsoever brought by the holders of the CPR Certificates in their capacity as holders or any matter brought by another party relating to the trusts, the CPR Certificates and their distribution, the Litigation and any actions taken by the Litigation Trustees relating to the trusts other than any damages arising from Washington Mutual, Inc.’s breach of the Commitment Agreement, failure to deliver CPR Certificates when due or failure to deposit trust expenses advanced to the trusts,

•		interest on any cash payment of taxes if proceeds are included in income of Washington Mutual, Inc. or Washington Mutual Bank, FA for federal income tax

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		purposes in a taxable year prior to the year such proceeds are received in cash,

•		any indemnification amounts provided to the Litigation Trustees under their Litigation Trustee Agreements, and

•		expenses reasonably incurred by Washington Mutual, Inc. in connection with the liquidation of any non-cash proceeds.

The Payment Trust will pay any amounts it receives from Washington Mutual, Inc. promptly to the CPR Trust after deducting any amounts withdrawn by Washington Mutual, Inc. to cover taxes arising solely from its ownership of the Payment Trust. The amount that the Payment Trust forwards to the CPR Trust will be increased by any after tax interest earned on the Commitment Amount.

Following receipt of any amounts from the Payment Trust, the CPR Trust will pay such amounts to the holders of CPR Certificates:

	•		reduced by the amount of any accrued but unpaid expenses payable by the CPR Trust, and

	•		increased by the amount of any interest or income received by the CPR Trust on the amount received from the Payment Trust.

In addition, the amount payable to CPR certificateholders will be reduced by the retained amount, which is $1.0 million or such greater amount as the Litigation Trustees reasonably determine to be necessary to cover all expenses and claims of the CPR Trust that may be incurred or arise after amounts payable under the Commitment Agreement have been paid in full and to satisfy the trust’s indemnification obligations. The retained amount will be retained for a period of one year or longer as reasonably determined by the Litigation Trustees. The CPR Trust will invest the retained amount in certain designated types of investments until the expiration of the retained amount period, subject to use of those funds to pay trust expenses.

Each CPR Certificate will entitle the holder to receive a fraction (equal to one divided by the total number of CPR Certificates outstanding) of the total amount payable to the holders of the CPR Certificates.

By way of example only, the following illustrates the payment that would be made to the holders of CPR Certificates assuming (1) three separate damage recovery scenarios: (i) an award of $5,026,131, which includes the $4,884,283 awarded by the Appeals Court in its September 22, 2003, decision and costs in the amount of $141,848 taxed against the federal government in favor of the plaintiffs by the Claims Court, (ii) an award of $8,968,631, which includes the $8,826,783 awarded by the Claims Court judgment in favor of plaintiffs entered on January 8, 2002, and costs in the amount of $141,848 taxed against the federal government in favor of the plaintiffs by the Claims Court, and (iii) an award of $170.65 million, the total amount of the Claims Court’s judgment plus additional amounts that plaintiffs sought pursuant to their motions for amended findings and judgment and costs in the amount of $141,848 taxed against the federal government in favor of the plaintiffs by the Claims Court, (2) a Washington Mutual, Inc. tax rate of 38.84%, (3) expense reimbursements to Washington Mutual, Inc. of $5.613 million as of June 30, 2004, and (4) interest in the

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amount of $860,981 payable as of June 30, 2004, to Washington Mutual, Inc. on the expense advances, calculated in accordance with terms provided in the Commitment Agreement.

The CPR Trust cannot make any assurances as to the possible recovery, if any, in the Litigation. Further, with respect to Scenario Three below, the CPR Trust notes that (i) the Petition for a Writ of Certiorari to the Supreme Court, filed by plaintiffs April 9, 2004, would have to be successful, (ii) the Litigation would have to be remanded by the Supreme Court either to the Appeals Court or the trial court for further proceedings, (iii) the amount of expense reimbursements and interest payable thereon would increase, and (iv) the final award (following further probable appeals), if any, could be less than the amount sought by plaintiffs.


	Scenario			Scenario			Scenario
Example	One			Two			Three
Assumed damage recovery	$	5,026,131		$	8,968,631		$	170,650,675

Portion of damage recovery payable to Washington Mutual, Inc. (85% of total recovery)	$	4,272,211		$	7,623,336		$	145,053,074
Assumed taxes		(1,659,327	)		(2,960,904	)		(56,338,614	)

Proceeds less assumed taxes		2,612,884			4,662,432			88,714,460
Reimbursement of expenses to Washington Mutual, Inc.		(5,613,196	)		(5,613,196	)		(5,613,196	)
Interest on advances from Washington Mutual, Inc.		(860,981	)		(860,981	)		(860,981	)

Net proceeds (shortfall)	$	(3,861,293	)	$	(1,811,745	)	$	82,240,283
Maximum number of CPR Certificates authorized and issuable pursuant to the Reorganization		38,919,884			38,919,884			38,919,884

Illustrative range of proceeds per CPR Certificate	$	—		$	—		$	2.11

As discussed below in the Litigation, on September 22, 2003, the Appeals Court reduced the plaintiffs’ award from $8,826,783 to $4,884,283. On December 12, 2003, the Appeals Court denied the plaintiffs’ November 5, 2003, Petition for Rehearing, thereby finalizing the award of $4,884,283 to plaintiffs. On April 9, 2004, the CPR Trust filed a Petition for a Writ of Certiorari (the “Petition”) in the Supreme Court, requesting review of the Appeals Court decision. The government filed an opposition to the Petition on July 9, 2004. On July 22, 2004, plaintiffs timely filed a reply brief to the government’s brief in opposition. According to the Supreme Court’s automated docket system, the case has been

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distributed to the Justices for Conference on September 27, 2004.

The amount owed by the CPR Trust to Washington Mutual, Inc. of approximately $5.613 million at June 30, 2004 for expense fund advances exceeds the $4,884,283 award plus the costs (of $141,848) taxed against the government in favor of the plaintiffs totaling $5.026 million. Accordingly, if the Litigation were to terminate because of a decision by the Supreme Court not to accept review of the case or a decision to affirm the Appeals Court judgment, there would be no recovery to the CPR certificateholders because the CPR Trust’s 85% share of the total judgment awarded by the Appeals Court (plus the CPR Trust’s 85% share of the $141,848 in total costs taxed against the federal government by the Court of Claims) is less than the amount that is owed by the CPR Trust to Washington Mutual, Inc. In summary, as has always been the case ever since the CPR Certificates were first registered and issued, it is possible that there will be no recovery to the CPR certificateholders in the Litigation and that the CPR Certificates may be worthless.

Share of Litigation Proceeds. Bank United Corp., Bank United, and Hyperion Partners L.P. are the plaintiffs in the Litigation. At the time the lawsuit was filed, Hyperion Partners L.P. was an affiliate of Bank United Corp. and Bank United. The terms of the July 1996 recovery agreement entered into by Bank United Corp., Bank United, and Hyperion Partners L.P., entitle Washington Mutual, Inc. and Washington Mutual Bank, FA, as successors to Bank United Corp. and Bank United, respectively, to 85% of any recovery in connection with the Litigation. Hyperion Partners L.P. is entitled to the remaining 15%. The recovery agreement further provides for Hyperion Partners L.P. to share in 15% of the expenses of the Litigation (primarily attorney fees and costs).

Certain Tax Matters. The Reorganization and the merger with Washington Mutual, Inc. were each structured to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code. However, receipt of the CPR Certificates by the former Bank United Corp. stockholders was treated as additional, taxable merger consideration to the stockholder for tax purposes in an amount equal to the fair market value of the CPR Certificates as of February 9, 2001. The Litigation Trustees believe that the fair market value on that date was $0.35 based on the average of the high and low trading prices of the CPR Certificates on the over-the-counter market on that date. The tax information returns provided to the Internal Revenue Service and the holders of CPR Certificates reflected this valuation. Receipt of CPR Certificates by holders of Bank United Corp. stock options and 8% Corporate Premium Income Equity Securities (which subsequently became the Washington Mutual, Inc. 8% Corporate Premium Income Equity Securities or WM PIES) were taxable based on the fair market value of the CPR Certificates at the time of receipt. CPR certificateholders are urged to consult with their tax advisor.

Tax Returns The CPR Trust is treated as a grantor trust for federal income tax purposes. Income resulting from payments received by the CPR Trust is required to be reported for federal income tax purposes by certificateholders. The CPR Trust is required to file Form 1041, U.S. Income Tax Return for Estates and Trusts, and provide the grantors with an information statement reporting their portion of the Trust’s income/loss.

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Expenses. Under the Commitment Agreement, at the request of the CPR Trust or the Payment Trust, Washington Mutual, Inc. must provide the trusts with funds to pay their expenses. The maximum aggregate amount that Washington Mutual, Inc. is obligated to pay for the life of the trusts is $10 million, unless the Litigation is pursued through additional trial court proceedings and appeals, in which case Washington Mutual, Inc. will be obligated to pay those additional expenses subject to a maximum obligation of $13 million. The Commitment Agreement requires each of the trusts, immediately prior to its termination, to refund to Washington Mutual, Inc. any amount provided to it in the expense fund but not used, provided that each of the trusts may retain a reasonable reserve of funds to pay for termination expenses. As of June 30, 2004, $5.613 million had been advanced to the CPR Trust.

Based on discussions with counsel to the Litigation and certain factors, including the fact that the Litigation commenced nine years ago and has involved extensive motion practice, discovery by the United States, and a trial on damages, the Litigation Trustees currently expect that there are sufficient funds available to the CPR Trust and the Payment Trust from Washington Mutual, Inc. to permit the trusts to fund their portion of the Litigation expenses, as well as the administrative and other expenses of the trusts.

The CPR Trust may issue CPR Certificates to raise funds to pay expenses. The CPR Trust is also authorized to borrow additional funds for the sole purpose of funding its expenses, subject to certain limitations. If the CPR Trust accrues expenses in excess of Washington Mutual, Inc.’s. funding obligations, it will deduct the amount of those expenses from the amount payable to the holders of CPR Certificates.

An office is maintained at 3200 Southwest Freeway, Suite 1001, Houston, Texas 77027, on behalf of the CPR Trust for the purpose of pursuing the Litigation and administering other duties under the declarations of trust for the CPR Trust and the Payment Trust.

The Litigation

General. The following description of the Litigation does not purport to be a full or complete description of the legal or factual issues presented, the court opinions rendered, or the relevant law, and the description is in all respects qualified by reference to the documents filed in connection with the relevant litigation, opinions, and law.

As a result of Bank United Corp.’s original acquisition of certain of the assets and liabilities of United Savings Association of Texas in 1988, the Federal Home Loan Bank Board approved a forbearance letter issued on February 15, 1989. Under the terms of the forbearance letter, the Federal Savings and Loan Insurance Corporation agreed to waive or forbear from enforcing certain regulatory provisions concerning capital requirements, liquidity requirements, accounting requirements and other matters. After the enactment of the Financial Institutions Reform Recovery and Enforcement Act of 1989 (the “Act” or “FIRREA”), the Office of Thrift Supervision took the position that the capital standards set forth in the Act applied to all savings institutions, including those institutions that had been operating under previously granted capital and accounting forbearances, and that the Act eliminated those forbearances.

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On July 25, 1995, Bank United Corp., Bank United and their then affiliate, Hyperion Partners L.P., filed suit against the United States in the U.S. Court of Federal Claims for alleged failures of the United States to abide by a capital forbearance that would have allowed Bank United to operate for ten years under negotiated capital levels lower than the levels required by the then existing regulations or successor regulations, to abide by its commitment to allow Bank United to count $110 million of subordinated debt as regulatory capital for all purposes and to abide by an accounting goodwill treatment that would have allowed Bank United to count the $30.7 million difference between Federal Savings and Loan Insurance Corporation payment obligations to Bank United and the discounted present value of future payments as capital for regulatory purposes and to amortize that amount over a period of twenty five years. The plaintiffs sought damages in excess of $550 million. The government argued that the damages to plaintiffs as a result of the breach, if any, were speculative and approached zero.

In July 1996, Bank United Corp. and Bank United entered into a recovery agreement with Hyperion Partners L.P. acknowledging the relative value among the parties of claims in the pending Litigation. The agreement confirmed that Bank United Corp. and Bank United would be entitled to receive 85% of the amount, if any, recovered as a result of any settlement of or a judgment on these claims and that Hyperion Partners L.P. would be entitled to receive 15% of this amount. The plaintiffs are obligated to continue to cooperate in good faith and to use their best efforts to maximize the total amount, if any, that they may recover. Pursuant to the agreement, Hyperion Partners L.P. shares in the expenses of the Litigation in the same proportion as it shares in any recovery in the Litigation, although Hyperion Partners L.P. does not share in any expenses relating to the CPR Trust, the Payment Trust, the CPR Certificates or the operation or administration thereof.

In March 1999, the U.S. Court of Federal Claims granted the plaintiffs’ motion for summary judgment on the issue of liability and held that the United States was liable. On August 5, 1999, the court denied a motion for summary judgment filed by the United States in which the United States asserted that the plaintiffs’ claims for lost profits damages were too speculative to permit recovery. The case proceeded to trial on the amount of damages on September 13, 1999. The evidentiary phase of the damages case ended on October 21, 1999. The parties submitted post-trial briefs followed by closing argument on February 7, 2000.

In April 2001, the court issued two procedural orders in the Litigation. On April 6, the court ordered publication of the March 1999 opinion granting summary judgment to Bank United Corp. and Bank United on the issue of liability. Because of an apparent oversight, the opinion had not been published earlier. On April 17, 2001 the court granted the government’s unopposed motion for leave to file the opinion issued by the Appeals Court in California Federal Bank vs. United States (discussed below) as supplemental authority in the Litigation.

In an Opinion and Order dated October 29, 2001, the court rejected plaintiffs’ lost profits claims and plaintiffs’ model for calculating the cost of substitute capital. The court held that plaintiffs fully mitigated the government’s breach and that the plaintiffs were entitled to damages totaling $8,826,783 for the cost of mitigating the breach. The amount awarded included $4,884,283 for the cost of mitigating the breach of the subordinated debt provision of the parties’ contract and $3,942,500 of transaction costs (comprised of

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commissions and fees) paid when Bank United issued 3,420,000 shares of preferred stock at a dividend rate of 10.12 percent to obtain $85,500,000 of equity capital in December 1992. The court also ruled that plaintiffs further mitigated the government’s breach by various other infusions of capital into Bank United, including a $4,200,000 infusion in 1990, a $15,000,000 infusion later in 1990, and a $16,138,988 infusion in 1991, totaling $35,338,988. In connection with those infusions, the court held that the plaintiffs would have been entitled to any proven costs incurred in connection with these mitigation infusions of capital, but stated that no evidence of costs related to such additional infusions was presented. Finally, the court awarded costs to plaintiffs.

The court entered judgment in the case on January 8, 2002, consistent with its previously issued Opinion and Order.

On January 23, 2002, the plaintiffs filed motions with the court asking it to (i) amend certain findings in its October 29, 2001 opinion and amend the judgment of January 8, 2002, (ii) reopen the record to receive additional documentary evidence, and (iii) reopen the record to admit additional evidence omitted from the trial record. The plaintiffs’ motions alleged that the court’s findings and judgment did not take into account undisputed evidence in the trial record relating to the costs of the mitigation found by the court. The plaintiffs alleged that the trial record contained evidence of the dividends paid to investors through March 1999 on the $85,500,000 of preferred stock Bank United issued in 1992, the $35,338,988 infused by plaintiffs into Bank United as common equity capital in 1990 and 1991, and the return plaintiffs would have made on that capital.

The motions also requested the court to amend its findings and judgment to incorporate the additional proven costs of the mitigation found by the court. Specifically, the plaintiffs alleged that they submitted evidence that they paid $54,126,972 in dividends on the 1992 preferred stock through March 31, 1999 and that they infused $35,338,988 into Bank United as common equity capital. In addition, the plaintiffs alleged that the trial record included evidence that plaintiffs were entitled to at least a 20 percent return on the $35,338,988 investment. Plaintiffs sought to reopen the trial record because Bank United continued to pay dividends on the 1992 preferred stock from March 31, 1999 through the end of 2000. Most of those dividends were paid after the trial, but before the date of the court’s opinion. Plaintiffs alleged that the record should be reopened to allow proof of those dividend payments and that the court’s amended findings and judgment should incorporate them as well. The government opposed the plaintiffs’ motions in their entirety. In appellate court briefs, the government stated that it was not challenging the trial court’s award to plaintiffs of $4,884,283, the cost of mitigating the breach of the subordinated debt provision of the parties’ contract.

On February 7, 2002, and March 7, 2002, plaintiffs submitted their Bill of Costs, seeking $437,978 in costs from the government. On February 21, 2002, the government filed an opposition to the plaintiffs’ Bill of Costs, requesting the court to deny plaintiffs any award of costs.

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In March 2004, the U.S. Court of Federal Claims rendered its decision on the plaintiffs’ Bill of Costs. The U.S. Court of Federal Claims taxed costs against the federal government in favor of the plaintiffs in the amount of $141,848.

On April 16, 2002, the court heard oral arguments on the January 23, 2002 motions. Following oral arguments, the court denied plaintiffs’ motions in their entirety.

On June 14, 2002, the plaintiffs filed a Notice of Appeal to the Appeals Court, appealing any and all rulings, orders, and judgments rendered by the court to date against the plaintiffs. These adverse rulings include the October 29, 2001 ruling that the plaintiffs were not entitled to any lost profits damages and the April 16, 2002 denial of certain motions made by the plaintiffs.

On June 19, 2002, the case was docketed by the Appeals Court.

Beginning in August 2002 through November 2002, the plaintiffs and the federal government filed their opening, reply and opposing briefs with the Appeals Court.

Oral argument took place on May 7, 2003 before a panel of judges of the Appeals Court comprised of Chief Judge Haldane R. Mayer, Judge Sharon Prost, and Judge Timothy B. Dyk.

On September 22, 2003, the Appeals Court rendered its decision on the appeals. In a nonprecedential opinion, written by Judge Prost, the trial court decision was affirmed-in-part and reversed-in-part. In summary, the Appeals Court affirmed the trial court’s rulings except for granting that part of defendant’s cross appeal seeking reduction of the award to plaintiffs by $3,942,500. Thus, plaintiff’s damages award has been reduced from $8,826,783 to $4,884,283.

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Plaintiffs did not seek a rehearing of the Appeals Court’s decision denying plaintiffs’ lost profits and cost of substitute capital claims.

On November 21, 2003, the defendant’s filed a Motion for Reissuance of a Nonprecedential Opinion as a Precedential Disposition with the Appeals Court and on December 1, 2003, the plaintiffs filed a Response to Defendant’s Motion for Reissuance of a Nonprecedential Opinion as a Precedential Disposition and a Motion for Leave to File the Defendant’s Motions and Plaintiffs’ Response as a Supplement to Plaintiffs’ Petition for Rehearing En Banc.

On December 12, 2003, the Appeals Court denied the plaintiffs’ Petition for Rehearing. Thus, the Appeals Court has determined a final award of $4,884,283 to the plaintiffs.

Following the Appeals Court denial, plaintiffs retained new counsel experienced in matters before the Supreme Court of the United States (“Supreme Court”). On April 9, 2004, the plaintiffs filed a Petition for a Writ of Certiorari (“Petition”) in the Supreme Court, requesting review of the Appeals Court decision. On July 9, 2004, the government timely filed its brief in opposition to the Petition. On July 22, 2004, plaintiffs timely filed a reply brief to the government’s brief in opposition. According to the Supreme Court’s automated docket system, the case has been distributed to the Justices for Conference on September 27, 2004. The Supreme Court is not expected to rule on the Petition until October 2004.

Related Cases. The Litigation is one of a number of cases filed against the United States in the United States Court of Federal Claims involving acquisitions of failed savings institutions and alleging that changes in regulatory capital calculation and capital regulations brought about by the Financial Institutions Reform Recovery and Enforcement Act (“FIRREA”) constitute a breach of the contract between the acquiring institution and the federal government. Each of these cases presents facts that are specific to the parties to the litigation, and the plaintiffs in these cases allege diverse legal theories of damages. Several cases have been tried and most of those have reached the appellate court.

The Appeals Court, which hears appeals from the United States Court of Federal Claims, has decided, in addition to Bank United v. United States, Glendale Federal Bank v. United States, California Federal Bank v. United States, Bluebonnet Savings Bank v. United States, Glass v. United States, Landmark Land Company v. United States, Coast Federal Bank v. United States, Castle v. United States, LaSalle Talman Bank v. United States, Bailey

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v. United States, Hansen Bancorp, Inc. v. United States, and Barron Bancshares, Inc. v. United States.

In Glendale, the Appeals Court reversed the Court of Federal Claims’ award of restitution damages as too speculative and indeterminate and remanded the case for determination of Glendale’s reliance damages. On remand, the Court of Federal Claims reaffirmed the previous award of $380.8 million in reliance damages, but denied further damages to plaintiffs. The government has appealed and Glendale has cross-appealed. This case is pending before the Appeals Court.

In California Federal, the Court of Federal Claims granted summary judgment in favor of the United States on California Federal’s lost profits claim. The Appeals Court reversed and remanded the case for a trial on lost profits. In addition, the Appeals Court affirmed the Court of Federal Claims’ factual finding that California Federal’s cost of replacing capital was limited to the transaction costs of replacing the goodwill phased out by FIRREA. Petitions for rehearing by both parties were denied by the Appeals Court and petitions for writ of certiorari to the Supreme Court of the United States by both parties were denied. On remand, the Court of Federal Claims found that California Federal failed to prove lost profits. California Federal has appealed the Court of Federal Claims’ decision to the Appeals Court, and the government has cross-appealed. This case is pending before the Appeals Court.

The Bluebonnet plaintiffs sought damages for additional borrowing costs caused by FIRREA. They did not seek lost profits. The Court of Federal Claims awarded plaintiffs no damages, because it found that they had not proved damages with reasonable certainty. The Appeals Court affirmed in part and reversed in part, finding that some of the plaintiffs’ additional borrowing costs were proved with reasonable certainty. The parties sought rehearing, which was denied. On remand, the Court of Federal Claims awarded $132.4 million to the Bluebonnet plaintiffs, a sum it believed was mandated. The Appeals Court vacated the Court of Federal Claims’ judgment and remanded the case for the Court of Federal Claims to determine the proper damages after further proceedings. The Bluebonnet plaintiffs sought rehearing, which was denied. This case is pending before the Court of Federal Claims.

In Glass, the Appeals Court reversed the Court of Federal Claims’ award of restitution and other damages on procedural grounds that are not at issue in the Litigation. The Appeals Court held that shareholders of the thrift and the Federal Deposit Insurance Corporation (“FDIC”) did not have standing to pursue their claims against the United States. The shareholders and the FDIC filed petitions for rehearing, which were denied. On remand, the Court of Federal Claims denied plaintiffs’ direct claims, and plaintiffs appealed. The Appeals Court affirmed on a procedural ground. This case is concluded.

In Landmark, the Court of Federal Claims awarded $21.5 million in restitution, the amount of plaintiffs’ initial investment in the thrift and denied Landmark’s claim for reliance damages on the ground that they were not foreseeable. The Court of Federal Claims also awarded the FDIC $17.7 million in restitution damages. The Appeals Court affirmed the

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judgment as to Landmark. The Appeals Court reversed the judgment as to the FDIC, holding that the FDIC did not have standing to pursue its claim against the United States. The FDIC and Landmark sought rehearing, which was denied. This case is concluded.

In Coast, the Court of Federal Claims, on motion for summary judgment, ruled that a $299 million capital credit granted Coast had to be amortized. This ruling foreclosed significant damages and Coast appealed. A panel of the Appeals Court initially reversed, holding that the capital credit did not have to be amortized, and remanded to the Court of Federal Claims for a determination of Coast’s damages. The Appeals Court subsequently granted rehearing en banc and reversed the panel, holding that the goodwill had to be amortized. The Appeals Court vacated the panel opinion and reinstated the judgment of the Court of Federal Claims. This case is concluded.

In Castle, the Court of Federal Claims awarded plaintiffs $15.1 million in restitution damages and rejected their Fifth Amendment takings claim. The Appeals Court reversed, holding that the contract documents did not require plaintiffs to contribute the $15.1 million to recapitalize the acquired thrift, that plaintiffs voluntarily contributed the $15.1 million, and that plaintiffs therefore could not recover it as damages under a restitution theory. The Appeals Court also affirmed the Court of Federal Claims’ holding on the takings theory. Castle’s petition for rehearing was denied, and the Supreme Court of the United States denied a petition for writ of certiorari. This case is concluded.

In LaSalle Talman, the Court of Federal Claims awarded $5 million in expenses related to the thrift’s acquisition by an outside investor that was made necessary by the breach, but rejected further relief because it found that the thrift was better off in the years after the acquisition than the thrift would have been absent the breach, in part because of the beneficial effect on the thrift of significant additional capital infusions made by the investor after the initial acquisition that mitigated the breach. The Appeals Court affirmed in part, but reversed and remanded for a calculation of damages based on the difference between the thrift’s projected profits absent the breach and the thrift’s post-breach profits, excluding the effect of the additional infusions that occurred after the breach was mitigated and unrelated to the breach. The government’s petition for rehearing was denied and the case was remanded for further proceedings. On remand to the Court of Federal Claims, this case went to trial in April 2004. The court has not yet issued a judgment.

In Bailey, the Court of Federal Claims granted summary judgment in favor of the United States on the plaintiffs’ contract and Fifth Amendment takings claim. The Court of Federal Claims ruled that the shareholders of the thrift and the FDIC did not have standing to pursue their contract claims, that the FDIC did not have standing to pursue its takings claim, and that the shareholders did not establish a taking of their contractual remedy. The Appeals Court affirmed the judgment on these same grounds. The shareholders filed a petition for rehearing, which was denied. The shareholders then filed a petition for writ of certiorari at the Supreme Court of the United States. The petition for writ of certiorari was denied by the Supreme Court on June 1, 2004, and the case is now concluded.

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In Hansen Bancorp, the Court of Federal Claims granted summary judgment in favor of the plaintiff’s restitution claim for $1 million infused into the bank at the time of the supervisory merger. The bank was subsequently seized by the government after FIRREA revoked regulatory capital forbearances. The Appeals Court reversed, holding that there was a genuine issue of material fact as to whether FIRREA constituted the “total breach” of the supervisory merger contract necessary to justify restitution. As a result, the Appeals Court remanded the case for the Court of Federal Claims to determine whether the facts and circumstances of this case constituted a total breach, rather than only rely on the Supreme Court’s decision in Winstar for that conclusion. The Appeals Court also held, however, that if the lower court were to find a “total breach” on remand, that the plaintiff would be entitled not only to the infused cash, but also to the value of stock swapped between the acquirer bank and the seized bank. This case is awaiting proceedings on remand in the Court of Federal Claims.

In Barron Bancshares, the Court of Federal Claims granted summary judgment to the government, determining that certain capital credit and supervisory goodwill terms in the supervisory merger agreement were not “contractual obligations,” but instead non-binding descriptions of current regulatory treatment, and that the breach of an additional regulatory forbearance term, while a contractual obligation, did not cause the bank’s seizure. The Appeals Court reversed the summary judgment for the government. According to the Appeals Court, the capital credit and supervisory goodwill terms were enforceable contractual obligations. Moreover, the Appeals Court held that there was a genuine issue of material fact as to whether the breach of the regulatory forbearance promise caused the bank’s seizure and, therefore, the damages at issue. The Appeals Court remanded the case to the Court of Federal Claims for further proceedings, which are currently pending.

Damages. Each savings institution affected by the Financial Institutions Reform Recovery and Enforcement Act and the applicable capital calculations and capital regulations addressed the resulting reduction in its regulatory capital in its own fashion based on the unique facts and circumstances faced by the institution. Accordingly, the extent and amount of any damages awarded to the institutions that have brought actions against the United States is expected to be fact specific. Even if plaintiffs in similar cases are successful in securing damage awards, there may not be any damage recovery in the Litigation.

At the trial in the U.S. Court of Federal Claims, plaintiffs offered evidence in support of three alternative damages models. The first model calculated the plaintiffs’ lost profits damages from the government’s three breaches of contract relating to capital levels, subordinated debt, and goodwill. The damages calculated totaled $553,291,000. A second model calculated lost profits damages arising solely from the breach of the subordinated debt promise, which totaled $96,085,000. The third model calculated what the cost of raising substitute capital in 1989 to repair the government’s three breaches would have been, which was calculated to be $117,227,000. In addition to any recovery under the alternative models, the plaintiffs sought recovery of $4,884,283 in out-of-pocket costs caused by the government’s breach of the subordinated debt promise. In appellate court briefs, the government stated that it was not challenging the trial court’s award to plaintiffs of that $4,884,283. As noted above, the court rejected plaintiffs’ lost profits claims and plaintiffs’

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model for calculating the cost of substitute capital. The court held that plaintiffs fully mitigated the government’s breach and that the plaintiffs were entitled to damages totaling $8,826,783 for the cost of mitigating the breach. Plaintiffs filed post trial motions seeking to amend the findings and judgment of the court and sought an additional amount of mitigation damages exceeding $160,000,000. The court denied those motions.

The Appeals Court reduced the damages originally awarded to the plaintiff’s from $8,826,783 to $4,884,283. On November 5, 2003, the plaintiffs’ filed a Petition for Rehearing in the Appeals Court, seeking a rehearing by the panel and a rehearing by the full Appeals Court sitting en banc. Plaintiffs sought a rehearing on that part of the Appeals Court decision regarding the amount of expectancy damages they are entitled to as a result of their mitigation efforts. Plaintiffs did not seek a rehearing of the Appeals Court’s decision denying plaintiffs’ lost profits and cost of substitute capital claims. The Appeals Court denied the Petition for Rehearing on December 12, 2003.

On April 9, 2004, the plaintiffs timely filed a Petition in the Supreme Court, requesting a review of the Appeals Court decision. On July 9, 2004, the government timely filed its brief in opposition to the Petition. On July 22, 2004, plaintiffs timely filed a reply brief to the government’s brief in opposition. According to the Supreme Court’s automated docket system, the case has been distributed to the Justices for Conference on September 27, 2004. The Supreme Court is not expected to rule on the Petition until October 2004.

Until such time as all appeal efforts have been exhausted, it is impossible to predict the total amount of any recovery available to be paid to the CPR certificateholders because any recovery in the Litigation could be less than the fees, costs, interest, taxes and tax benefits associated with that recovery. Finally, as noted above, it is possible there will be no recovery in the Litigation.

Legal expense, which is primarily comprised of third party attorney fees and costs, totaled $15,834 and $108,585 for the three and six months ended June 30, 2004, and $150,724 and $176,320 for the three and six months ended June 30, 2003, respectively.

Management of the Litigation

General. The Litigation Trustees are Salvatore A. Ranieri, a former director of Bank United Corp. and the former General Counsel of Bank United Corp.’s predecessor entities, and Jonathon K. Heffron, the former Executive Vice President, Chief Operating Officer and General Counsel of Bank United Corp. and Bank United. Messrs. Ranieri and Heffron both have knowledge of the facts underlying the Litigation. Mr. Ranieri is also the General Counsel of Hyperion Partners L.P. and he wholly owns and controls a general partner of the general partner of Hyperion Partners L.P. Messrs. Ranieri and Heffron have been involved in the prosecution of the Litigation to date. Under the Declaration of Trust for the CPR Trust and the Litigation Trustee Agreements, the Litigation Trustees have the sole and exclusive right to instruct Washington Mutual, Inc. with respect to all decisions regarding the prosecution of the Litigation. This right includes the right to direct Washington Mutual, Inc. to dismiss, settle, or cease prosecuting the Litigation and to control other aspects of the Litigation, such as hiring, firing, and supervising legal counsel. However, the Litigation Trustees may not cause Washington Mutual, Inc. or Washington Mutual Bank, FA to

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enter into any settlement agreement or other ruling or agreement as part of the resolution of the Litigation or a related Internal Revenue Service ruling if the agreement imposes any liability or obligation on Washington Mutual, Inc. or any of its affiliates or adversely affects or restricts the conduct of its business or adversely affects its tax posture with respect to other matters, other than a standard settlement release relating only to the Litigation or other related claims that the plaintiffs could have brought immediately prior to the Washington Mutual, Inc. merger.

Prior to the completion of the Washington Mutual, Inc. merger, Bank United Corp. established an advisory committee for the CPR Trust composed of certain then current directors of Bank United Corp. The members of the advisory committee are Lewis S. Ranieri, former Chairman of the Board of Directors of Bank United Corp., Barry C. Burkholder, a former director and the former Chief Executive Officer and President of Bank United Corp., and Michael Stevens, a former director of Bank United Corp. Pursuant to the Declaration of Trust of the CPR Trust, the Litigation Trustees are entitled to consult with the advisory committee. The Litigation Trustees have not had any consultations with the advisory committee.

The Litigation Trustee agreements provided for compensation to each Litigation Trustee during the term of his service as a Litigation Trustee. The agreements provided for payments totaling $500,000 per year for three years. The Litigation Trustees have been paid all of their compensation payments as of December 31, 2003. The Litigation Trustees continue to be entitled to reimbursement of all reasonable out-of-pocket expenses and other expenses. In addition, as an incentive to the Litigation Trustees, each of the Litigation Trustees received 291,899 CPR Certificates, representing 0.75% of the total number of CPR Certificates issuable in the Reorganization. If either of the Litigation Trustees were to resign his position prior to the termination of the Litigation, he would forfeit the 291,899 CPR Certificates awarded to him. As of the date hereof, Messrs. Heffron and Ranieri beneficially own 516,241 and 727,899 CPR Certificates, respectively.

Authority. The Declaration of Trust for the CPR Trust provides that the Litigation Trustees may adopt their own rules and procedures, but may act only with the approval of both Litigation Trustees or the sole remaining Litigation Trustee then in office. If the number of Litigation Trustees is increased above two, then approval of the Litigation Trustees requires the affirmative vote of a majority of the Litigation Trustees then in office. The Litigation Trustees may, in their discretion, delegate to one or more of the Litigation Trustees the authority to act on behalf of the Litigation Trustees except regarding the retention or dismissal of counsel for Washington Mutual, Inc. or the Litigation Trustees or the approval of a settlement or dismissal of the Litigation.

Institutional Trustee. The institutional trustee is Wachovia Bank, N.A. (successor to First Union Trust Company, National Association). Wachovia Bank, N.A. also serves as the paying agent, the transfer agent, and the certificate registrar for the Trust. In these capacities the institutional trustee will, among other things, establish necessary bank accounts on behalf of the Trust, distribute the payment amount, if any, and other amounts to certificateholders, authenticate CPR Certificates, resolve certificateholder transfer and other issues, and ensure the preservation of the Trust’s valid existence under the laws of Delaware.

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Summary Financial Information

The CPR Trust has no revenues. The CPR Trust’s only source of funding for payment of expenses and operations is Washington Mutual, Inc.’s obligation to fund expenses under the Commitment Agreement. The following is a statement that details the expense activities for the six months ended June 30, 2004, as well as the cash balance available to cover accrued but unpaid expenses (dollars in thousands):


	Six months ended
	June 30, 2004
	(unaudited)
Cash balance at December 31, 2003	$	142
Deposits by WAMU during the period		121

		263
Disbursements through period end
Licenses, permits and filing fees		(15	)
Legal		(120	)
Accounting and auditing fees		(60	)
Trust administration fees		(17	)
Office and other		(22	)

Total disbursements through period end		(234	)

Cash or expense fund advances not used at period end		29
Accrued expenses at period end, excluding interest costs
Legal		(10	)
Accounting and auditing fees		(65	)
Financial printing		(8	)
Office and other		(9	)

Total		(92	)

Accrued expenses in excess of June 30, 2004 cash balances	$	(63	)

During July 2004, an expense fund advance of $62,132 was received from Washington Mutual, Inc. in order to fund accrued expenses as of June 30, 2004. Additional advances will be requested and received from Washington Mutual, Inc. as needed to fund future cash requirements up to the maximum amount as defined in the Commitment

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Agreement.

Interest expense of $200,485 was accrued in other liabilities during the six months ended June 30, 2004, for interest payable to Washington Mutual, Inc. on expense fund advances, at an interest rate provided for under the terms of the Commitment Agreement. Payment of such accrued interest payable is contingent upon receipt of the Commitment Amount.

The CPR Trust may issue additional CPR Certificates that represent pro rata interests in the assets of the CPR Trust in order to pay expenses. However, it may not be possible to obtain purchasers of the additional CPR Certificates and there is no assurance that the terms of any such purchases would be reasonable. In the event additional CPR Certificates are issued and existing CPR certificateholders are not given the opportunity to purchase, or do not purchase a pro rata amount in such issuance, such certificateholders’ indirect interest in the litigation payment amount will be diluted. The CPR Trust is authorized to borrow additional funds for the sole purpose of funding expenses of the CPR Trust, but only if such borrowings represent debt of the CPR Trust (and not ownership interests) for federal income tax purposes. Furthermore, it may not be possible for the CPR Trust to borrow funds (and, if it is able to borrow funds, there can be no assurance as to the terms upon which such borrowings may be available).

Forward-Looking Information

Statements and financial discussion and analysis by the Litigation Trustees contained throughout this Form 10Q that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks and uncertainties. For further information regarding these risks and uncertainties, see “Risk Factors” in the Prospectus filed by the CPR Trust with, and declared effective by, the SEC on January 9, 2001 (SEC File Number 333-49302).

Certificateholder Inquiries

Certificateholder inquiries, including requests for the following: (i) change of address; (ii) replacement of lost stock certificates; (iii) certificate name registration changes; (iv) Quarterly Reports on Form 10-Q; (v) Annual Reports on Form 10-K; and (vii) information regarding stockholdings, should be directed to:

Wachovia Bank, N.A.
Equity Services Group
NC 1153
1525 West. W.T. Harris Blvd., 3C3
Charlotte, North Carolina 28262-8522

Item 3. Not Applicable

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Litigation Trustees have reviewed and evaluated the effectiveness of the disclosure controls and procedures (as defined in Exchange Act Rules 240.13a-14(c) and 15d-14(c)) as of a date within 90 days before the filing of this quarterly report. Based on that evaluation, the Litigation Trustees have concluded that the current disclosure controls and procedures are effective in timely providing them with material information relating to the CPR Trust required to be disclosed in the reports filed or submitted under the Exchange Act.

Changes in Internal Controls

There has been no change in our internal controls over financial reporting that occurred during the three months ended June 30, 2004 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

The Registrant has no litigation currently pending. For a discussion of the litigation in which the CPR Trust has an interest, see Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – The Litigation.

Items 2 through 5 are not applicable or the answers are negative.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Jonathon K. Heffron.

31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Salvatore A. Ranieri.

32.1 Certification of Periodic Report by Litigation Trustee Jonathon K. Heffron.

32.2 Certification of Periodic Report by Litigation Trustee Salvatore A. Ranieri.

(b) Reports on Form 8-K

During the period covered by this report, the following reports on Form 8-K were filed by the registrant:

July 16, 2004, Item 5, Other Events. Press release announces that the government timely filed its Brief in Opposition to the Plaintiffs’ Petition for a Writ of Certiorari in the

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Supreme Court of the United States.

July 26, 2004, Item 5, Other Events. Press release announces that the plaintiffs had timely filed a reply brief to the government’s brief in opposition to the plaintiffs’ petition for a writ of certiorari in the Supreme Court of the United States, which had requested review of the decision of the U.S. Court of Appeals for the Federal Circuit.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	BANK UNITED CORP. LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
	By:	/s/ Jonathon K. Heffron
		Name:	Jonathon K. Heffron
		Title:	Litigation Trustee


	By:	/s/ Salvatore A. Ranieri
		Name:	Salvatore A. Ranieri
Dated: August 2, 2004		Title:	Litigation Trustee

INDEX TO EXHIBITS


Exhibit Number		Description
31.1		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Jonathon K. Heffron.
31.2		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Salvatore A. Ranieri.
32.1		Certification of Periodic Report by Litigation Trustee Jonathon K. Heffron.
32.2		Certification of Periodic Report by Litigation Trustee Salvatore A. Ranieri.

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BANK UNITED CORP LITIGATION CONTINGENT PAYMENTS RIGHTS TRUST 10-Q