Failed banks don’t always go gentle into that good night. Indeed, at least one is becoming a kind of special purpose acquisition vehicle or company, also known as a SPAC, for  leveraged buyout giant Kohlberg Kravis Roberts, reported The Street. At an investment conference Thursday, according to The Street, a hedge fund manager said KKR’s next billion-dollar deal may come via WMI Holdings, the publicly traded shell company of Washington Mutual, the failed thrift.

The hedge fund manager, Stephen J. Errico of Locust Wood Capital Advisers, recently invested in WMI Holdings (WMIH) to benefit from any deals KKR makes. “Expect acquisitions to be announced sooner rather than later,” Errico said at the conference. In January, KKR made a “strategic investment” in WMI Holdings, including $11 million in convertible preferred stock and five-year warrants to purchase 61.4 million shares of common stock, according to The Street.

Why would KKR invest in a shell company? WMI Holdings, estimates Errico, has about $6 billion in net operating loss carryforwards, which could be applied to future profits to reduce tax liabilities. Next month, according to Errico, a two-year waiting period to use the loss carryforwards expires.

The assets and liabilities of Washington Mutual were acquired by JPMorgan in 2008, after the bank had been seized by the Office of Thrift Supervision and placed into receivership with the Federal Deposit Insurance Corp.

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