(Reuters) -- Washington Mutual Inc, one of the biggest corporate casualties of the 2008 financial crisis, on Monday emerged from bankruptcy protection, just two weeks after Lehman Brothers Holdings Inc also emerged from Chapter 11.

The Seattle-based company, the largest U.S. bank or thrift to fail, said it plans to begin repaying about $7 billion to creditors. Many of these are hedge fund investors specializing in buying securities of bankrupt companies.

Washington Mutual's emergence from Chapter 11 ends nearly 3-1/2 years of court battles that saw the company propose seven reorganization plans.

U.S. Bankruptcy Judge Mary Walrath in Delaware officially approved the seventh plan on February 23, court records show.

The reorganized company is known as WMI Holdings Corp. It includes a small mortgage reinsurance business, WMI Mortgage Reinsurance Co, owned by former preferred and common shareholders. Washington Mutual's existing common stock has been canceled.

With about $307 billion of assets, Washington Mutual failed on September 25, 2008, 10 days after Lehman went bankrupt, succumbing to a run on deposits and losses on tens of billions of dollars of risky mortgages and home equity loans.

JPMorgan Chase & Co immediately bought Washington Mutual's banking operations in a $1.88 billion transaction arranged by the FDIC. Washington Mutual's holding company filed for protection from creditors on September 26, 2008.

Weil, Gotshal & Manges represented Washington Mutual in the bankruptcy proceedings.

The case is In re: Washington Mutual Inc, U.S. Bankruptcy Court, District of Delaware, No. 08-12229.

(Reporting By Jonathan Stempel; Editing by Bernard Orr)