The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: Failed Banks

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FDIC: Banks Prosper, Problem Institutions Remain

Posted in Failed Banks
The banking industry had a “positive quarter” in the third quarter of 2014, according to the FDIC”s latest Quarterly Banking Profile. Banks continue to improve and are performing  better than during the same period a year ago. In the aggregate during the quarter, banks reported income growth based on growing revenue rather than just lower … Continue Reading

FDIC: Banks Improve, Problem Institutions Linger

Posted in Failed Banks
Overall, the banking industry continued to improve in the first quarter of 2014, although banks did see their noninterest income decline due to reduced mortgage activity and a drop in trading revenue, according to the FDIC’s Quarterly Banking Profile for 1Q14. The latest Quarterly Banking Profile can be found here and the FDIC’s May 28, … Continue Reading

D&O Policy Excluding “Receiver” Claims Bars Coverage for FDIC Failed Bank Lawsuit

Posted in Failed Banks
In an interesting April 7, 2014 opinion (here), Magistrate Judge Stanley A. Boone of the Eastern District of California, applying California law, held that a D&O insurance policy’s insured vs. insured exclusion precludes coverage for claims brought against former officers of the failed County Bank of Merced, California by the FDIC in its capacity as … Continue Reading

FDIC: Banks Improve, Number of Problem Institutions Continues to Decline

Posted in Failed Banks
The commercial banking industry is continuing its rebound from the subprime meltdown and the global financial crisis. According to the FDIC’s latest Quarterly Banking Profile for the period ending December 31, 2014 (here), the industry’s overall earnings continue to improve, largely as a result of reduced loan-loss provisions. However, operating revenue declined during 2013 compared … Continue Reading

Eleventh Circuit Rejects FDIC’s “No Duty” Argument, Allows Post-Receivership Affirmative Defenses Against the Agency

Posted in Failed Banks
One of the most contentious issues in the litigation the FDIC has been pursuing in its capacity as receiver of various failed banks is whether the defendant former directors and officers can assert affirmative defenses against the FDIC for the agency’s own conduct.   In a part of a December 23, 2013 Eleventh Circuit opinion … Continue Reading

Are Bank Directors and Officers Entitled to Less Business Judgment Rule Protection Than Other Corporate Directors and Officers?

Posted in Failed Banks
Are bank directors and officers sufficiently different from directors and officers of ordinary business corporations that the protections of the business judgment rule available to other directors and officers are not available to protect directors and officers of a bank? That is a question that Northern District of Georgia Judge Thomas W. Thrash, Jr. asked … Continue Reading

Reps and Warranties Insurance: Multiple-Based Damages Claims

Posted in D & O Insurance, Failed Banks
The purchase of reps and warranties insurance is an increasingly common element of mergers and acquisitions transactions. But while the uptake of reps and warranties insurance has increased, concerns remain about how a reps and warranties insurance will respond if a claim arises based on an allegation that a seller has breached a financial statement … Continue Reading

D&O Insurance: Insured vs. Insured Exclusion Unambiguously Precludes Coverage for FDIC Failed Bank Lawsuit

Posted in D & O Insurance, Failed Banks
One of the recurring D&O insurance coverage issues that has arisen during the current wave of failed bank litigation has been the question whether coverage for an action by the FDIC in its role as receiver of a failed bank against a failed bank’s directors and officers is precluded by the Insured vs. Insured exclusion … Continue Reading

Failed Colonial Bank’s Accountants Lose Bid to Dismiss FDIC’s Suit Against Them

Posted in Accountant Liability, Failed Banks
A federal court has denied the motion of the accountants of the failed Colonial Bank’s holding company to dismiss the claims the FDIC, in its capacity as the failed bank’s receiver, had filed against them. As discussed here, the FDIC’s November 2012 lawsuit was the first the agency had filed against a failed bank’s accounting … Continue Reading

FDIC Failed Bank D&O Litigation Update

Posted in Failed Banks
On July 15, 2013, the FDIC provided the latest update on the web page on which the agency is tracking the litigation it has filed and that has been authorized against the directors and offices of failed banks. According to the latest update, the FDIC has now filed a total of 69 lawsuits against failed … Continue Reading

When the Business Judgment Rule Isn’t Available to Protect Directors

Posted in Director and Officer Liability, Failed Banks
A recurring issue in the litigation the FDIC has filed against the directors and officers of failed banks is the question of whether or not officers – as opposed to directors – can rely on the business judgment rule as a defense under applicable state law. A July 8, 2013 decision by Judge Dean Pregerson applying … Continue Reading

FDIC Failed Bank Litigation Update

Posted in Failed Banks
Typically, the FDIC updates the professional liability lawsuits page about once a month, but on June 7, 2013, only about two weeks after its last update, the FDIC again updated the page to include new lawsuit information. According to the information in the latest update, the FDIC has now filed a total of 65 lawsuits … Continue Reading

Cornerstone Research Releases Failed Bank Litigation Update

Posted in Failed Banks
Failed bank lawsuit this year area on pace to total the largest annual number of lawsuits yet during the current bank failure wave, according to an April 2013 report from Cornerstone Research entitled “Characteristics of FDIC Lawsuits Against Directors and Officers” (here). The report identifies several factors – including the FDIC’s recently published settlement data … Continue Reading