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
FDIC Report Shows That Despite Improvement Problem Banks Persist
The FDIC’s Quarterly Banking Profile for the second quarter of 2013, which the agency released on August 29, 2012, shows that the general positive trends in the banking industry are continuing, but revenue growth is weak and the low interest rate environment is creating challenges for many banks. In addition, the number of problem institutions
Regulatory Enforcement: Using FIRREA to Prosecute Financial Fraud
Back in 2009, when the current bank failure litigation wave was in its very earliest stages, I noted that in its preliminary efforts to lay the groundwork to pursue failed bank litigation, the FDIC had resurrected FIRREA, a statutory vestige from the S&L crisis in the late 80s and early 90s that had in the
FDIC Failed Bank D&O Litigation Update
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
When the Business Judgment Rule Isn’t Available to Protect Directors
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