As part of our beat here at The D&O Diary, we have to read a lot of judicial decisions. We are well acquainted with the fact that court rulings vary quite a bit, but every now and then we read an opinion that makes us stop and say – “What?” That was
FDIC: Banks Improve, Number of Problem Institutions Continues to Decline
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
Why Did the Bank Fail?: Defending Failed Bank Directors and Officers
Since the early stages of the financial crisis, nearly 500 banks have failed across the U.S., and even though we are now well past the peak of the financial crisis, banks continue to fail. Yet during the same time as scores of banks were failing, many more banks did not fail – which raises the
Eleventh Circuit Rejects FDIC’s “No Duty” Argument, Allows Post-Receivership Affirmative Defenses Against the Agency
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
Banks: Forget Too Big to Fail, How About Too Small to Succeed?
According to the FDIC’s latest Quarterly Banking Profile (here), as of September 30, 2013, there were 6,891 federally insured banking institutions, down from 6,940 at the end of the second quarter and down from 7,141 as of September 30, 2012. There were 8,680 banking institutions as recently as December 31, 2006, meaning that
Are Bank Directors and Officers Entitled to Less Business Judgment Rule Protection Than Other Corporate Directors and Officers?
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
Reps and Warranties Insurance: Multiple-Based Damages Claims
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
Cornerstone Releases Updated Failed Bank Litigation Report
Not only have the number of 2013 filings of FDIC’s lawsuits against the former directors and officers of failed banks already exceeded any prior year’s filings, but the pace of filings in the second and third quarter this year exceed the filing rate in an any equivalent period during the prior three years, according to
D&O Insurance: Insured vs. Insured Exclusion Unambiguously Precludes Coverage for FDIC Failed Bank Lawsuit
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
Failed Colonial Bank’s Accountants Lose Bid to Dismiss FDIC’s Suit Against Them
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