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Professional Liability Lawsuits
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As receiver for a failed financial institution, the FDIC may sue professionals who played a role in the failure of the institution in order to maximize recoveries. These individuals can include officers and directors, attorneys, accountants, appraisers, brokers, or others. Professional liability claims also include direct claims against insurance carriers such as fidelity bond carriers and title insurance companies.

The FDIC follows the policies adopted by the FDIC Board in 1992, Statement Concerning the Responsibilities of Bank Directors and Officers, which can be found at http://www.fdic.gov/regulations/laws/rules/5000-3300.html#fdic5000statementct, and require Board approval before actions are brought against directors and officers.

Professional liability suits are only pursued if they are both meritorious and cost-effective. Before seeking recoveries from professionals, the FDIC conducts a thorough investigation into the causes of the losses. Most investigations are completed within 18 months from the time the institution is closed. Prior to filing the claim, staff will attempt to settle with the responsible parties. If a settlement cannot be reached, however, a complaint will be filed, typically in federal court.

As receiver, the FDIC has three years for tort claims and six years for breach-of-contract claims to file suit from the time a bank is closed. If state law permits a longer time, the state statute of limitations is followed.

Professionals may be sued for either gross or simple negligence. The Supreme Court has ruled that the FDIC may pursue simple negligence claims against directors and officers if state law permits (Atherton v. FDIC). Federal law preempts state law that insulates directors and officers from gross negligence or worse conduct. Bank directors are allowed to exercise business judgment without incurring legal liability.

Not all bank failures result in Director and Officer (D&O) lawsuits. The FDIC brought claims against directors and officers in 24 percent of the bank failures between 1985 and 1992.

From 1986 through 2012, the FDIC and former Resolution Trust Corporation (1989-1995) collected $6.8 billion from professional liability claims. Over that same time, they spent $1.9 billion to fund all professional liability claims and investigations. Early in the process of professional liability claims, expenses will often exceed recoveries due to the costs incurred in handling new investigations. Professional liability program recoveries lag expenses by several years until settlements occur and judgments are awarded.

From January 1, 2009, through April 10, 2014, the FDIC has authorized suits in connection with 136 failed institutions against 1,102 individuals for D&O liability. This includes 94 filed D&O lawsuits (21 of which have fully settled and 1 of which resulted in a favorable jury verdict) naming 724 former directors and officers. The FDIC also has authorized 58 other lawsuits for RMBS, LIBOR suppression, fidelity bond, insurance, accounting malpractice, appraiser malpractice, and attorney malpractice claims. In addition, 69 residential mortgage malpractice and fraud lawsuits are pending, consisting of lawsuits filed and inherited.

While FDIC is fully prepared to litigate its claims against professionals of failed institutions to judgment, at any time during the process the parties may settle. To view settlements with former directors and officers of failed institutions, please visit: Professional Liability Settlements Agreements.

For additional background on Professional Liability Suits, please see Chapter 11 of "Managing the Crisis: The FDIC and RTC Experience" http://www.fdic.gov/bank/historical/managing/history1-11.pdf.

 

  Authorized D&O
Defendants
Authorized in 2009 11
Authorized in 2010 98
Authorized in 2011 264
Authorized in 2012 369
Authorized in 2013 316
January 2014 13
February 2014 18
April 2014 13
Total 1,102

D&O Suits Filed

  1. FDIC as Receiver for IndyMac Bank, F.S.B. v. Van Dellen, Case No. 2:10-cv-04915-DSF-CW (U.S. District Court for the Central District of California Filed Jul. 2, 2010).
  2. FDIC as Receiver of Heritage Community Bank v. Saphir, Case No. 1:10-cv-07009 (U.S. District Court for the Northern District of Illinois Filed Nov. 1, 2010).
  3. FDIC as Receiver for 1st Centennial Bank v. Appleton, Case No. 2:11-cv-00476-JAK-PLA (U.S. District Court for the Central District of California Filed Jan. 14, 2011).
  4. FDIC as Receiver for Integrity Bank of Alpharetta v. Skow, Case No. 1:11-cv-00111-JEC (U.S. District Court for the Northern District of Georgia Filed Jan. 14, 2011).
  5. FDIC as Receiver of Corn Belt Bank and Trust Company v. Stark, Case No. 3:11-cv-03060-SEMBGC (U.S. District Court for the Central District of Illinois Filed Mar. 1, 2011).
  6. FDIC as Receiver of Washington Mutual Bank v. Killinger, Case No. 2:11-cv-00459-MJP (U.S. District Court for the Western District of Washington Filed Mar. 16, 2011).
  7. FDIC as Receiver for Wheatland Bank v. Spangler, Case No. 10-cv-04288 (U.S. District Court for the Northern District of Illinois Filed May 5, 2011).
  8. FDIC as Receiver for IndyMac Bank, F.S.B. v. Perry, Case No. 11-cv-05561-ODW-MRW (U.S. District Court for the Central District of California Filed Jul. 6, 2011).
  9. FDIC as Receiver for Haven Trust Bank v. Briscoe, Case No. 1:11-cv-02303-SCJ (U.S. District Court for the Northern District of Georgia Filed Jul. 14, 2011).
  10. FDIC as Receiver of Michigan Heritage Bank v. Cuttle, Case No. 2:11-cv-13442-BAF-MKM (U.S. District Court for the Eastern District of Michigan Filed Aug. 8, 2011).
  11. FDIC as Receiver of The Columbian Bank and Trust Co. v. McCaffree, Case No. 2:11-cv-02447-JAR-KGS (U.S. District Court for the District of Kansas Filed Aug. 9, 2011).
  12. FDIC as Receiver for Cooperative Bank v. Rippy, Case No. 7:11-cv-00165-BO (U.S. District Court for the Eastern District of North Carolina Filed Aug. 10, 2011).
  13. FDIC as Receiver for Silverton National Bank, N.A. v. Bryan, Case No. 1:11-cv-02790-JEC (U.S. District Court for the Northern District of Georgia Filed Aug. 22, 2011).
  14. FDIC as Receiver for First National Bank of Nevada v. Dorris, Case No. 11-cv-01652-GMS (U.S. District Court for the District of Arizona Filed Aug. 23, 2011).
  15. FDIC as Receiver for Alpha Bank v. Blackwell, Case No. 11-cv-03423 (U.S. District Court for the Northern District of Georgia Filed Oct. 7, 2011).
  16. FDIC as Receiver for Mutual Bank v. Mahajan, Case No: 1:11-cv-07590 (U.S. District Court for the Northern District of Illinois Filed Oct. 25, 2011).
  17. FDIC as Receiver for Westsound Bank v. Johnson, Case No. 3:11-cv-05953-RBL (U.S. District Court for the Western District of Washington Filed Nov. 18, 2011).
  18. FDIC as Receiver of Bank of Asheville v. Greenwood, Case No. 1:11-cv-00337-MR-DLH (U.S. District Court for the Western District of North Carolina Filed Dec. 29, 2011).
  19. FDIC as Receiver for R-G Premier Bank of Puerto Rico v. Galán-Alvarez, Case No. 3:12-cv-01029-JAG (U.S. District Court for the District of Puerto Rico Filed Jan. 18, 2012).
  20. FDIC as Receiver of Westernbank Puerto Rico v. Garcia, Case No. 3:11-cv-02271-GAG (U.S. District Court for the District of Puerto Rico Filed Jan. 20, 2012).
  21. FDIC as Receiver for County Bank v. Hawker, Case No.1:12-cv-00127-LJO-DLB (U.S. District Court for the Eastern District of California Filed Jan. 27, 2012).
  22. FDIC as Receiver on Behalf of Silver State Bank v. Johnson, Case No. 2:12-cv-00209 (U.S. District Court for the District of Nevada Filed Feb 9, 2012).
  23. FDIC as Receiver for Community Bank & Trust v. Miller, Case No. 2:12-cv-00042-WCO (U.S. District Court for the Northern District of Georgia Filed Feb. 24, 2012).
  24. FDIC as Receiver for Freedom Bank of Georgia v. Adams, Case No. 1:12-cv-00726-JOF (U.S. District Court for the Northern District of Georgia Filed Mar. 2, 2012).
  25. FDIC as Receiver for Broadway Bank v. Giannoulias, Case No. 1:12-cv-01665 (U.S. District Court for the Northern District of Illinois Filed Mar. 7, 2012).
  26. FDIC as Receiver for Florida Community Bank v. Price, Case No. 2:12-cv-00148 (U.S. District Court for the Middle District of Florida Filed Mar. 13, 2012).
  27. FDIC as Receiver for Omni National Bank v. Klein, Case No. 1:12-cv-00896-RLV (U.S. District Court for the Northern District of Georgia Filed Mar. 16, 2012).
  28. FDIC as Receiver for Cape Fear Bank v. Coburn, Case No. 7:12-cv-00082-BO (U.S. District Court for the Eastern District of North Carolina Filed Apr. 4, 2012).
  29. FDIC as Receiver for First Bank of Beverly Hills v. Faigin, Case No. 12-cv-03448 (U.S. District Court for the Central District of California Filed Apr. 20, 2012).
  30. FDIC as Receiver for Innovative Bank v. Hong, Case No. 12-cv-2658 (U.S. District Court for the Northern District of California Filed May 23, 2012).
  31. FDIC as Receiver for Community Bank of Arizona v. Jamison, Case No. 12-cv-01508 (U.S. District Court for the District of Arizona Filed Jul. 13, 2012).
  32. FDIC as Receiver for Piedmont Bank v. Whitley, Case No. 12-cv-170 (U.S. District Court for the Northern District of Georgia Filed Jul. 13, 2012).
  33. FDIC as Receiver for Benchmark Bank v. Samuelson, Case No. 1:12-cv-07907 (U.S. District Court for the Northern District of Illinois Filed Oct. 2, 2012).
  34. FDIC as Receiver for American United Bank v. Thompson, Case No. 1:12-cv-03620-AT (U.S. District Court for the Northern District of Georgia Filed Oct. 17, 2012).
  35. FDIC as Receiver for United Security Bank v. Neese, Case No. 1:12-cv-03694-SCJ (U.S. District Court for the Northern District of Georgia Filed Aug. 23, 2012).
  36. FDIC as Receiver for Ameribank v. Baldini, Case No. 1:12-cv-07050 (U.S. District Court for the Southern District of West Virginia Filed Oct. 26, 2012).
  37. FDIC as Receiver for Pacific Coast Bank v. Hahn, Case No. 8:12-cv-01938 (U.S. District Court for the Central District of California Filed Nov. 6, 2012).
  38. FDIC as Receiver for Century Bank, FSB v. Florescue, Case No. 8:12-cv-02547-SMJ-TBM (U.S. District Court for the Middle District of Florida Filed Nov. 9, 2012).
  39. FDIC as Receiver of Community Bank of West Georgia v. Hayden, Case No. 3:12-cv-00165-TCB (U.S. District Court for the Northern District of Georgia Filed Nov. 15, 2012).
  40. FDIC as Receiver for Buckhead Community Bank of Atlanta v. Loudermilk, Case No. 1:12-cv-04156-TWT (U.S. District Court for the Northern District of Georgia Filed Nov. 30, 2012).
  41. FDIC as Receiver for First Security National Bank v. Baker, Case No. 12-cv-04173-RWS (U.S. District Court for the Northern District of Georgia Filed Dec. 3, 2012).
  42. FDIC as Receiver for Rockbridge Commercial Bank v. McKinnon, Case No. 1:12-cv-04313-TCB (U.S. District Court for the Northern District of Georgia Filed Dec. 13, 2012).
  43. FDIC as Receiver for Peoples First Community Bank v. Brudnicki, Case No. 5:12-cv-00398-RS-GRJ (U.S. District Court for the Northern District of Florida Filed Dec. 17, 2012).
  44. FDIC as Receiver for Alliance Bank v. Reis, Case No. 8:12-cv-02212-JST-AN (U.S District Court for the Central District of California Filed Dec. 21, 2012).
  45. FDIC as Receiver for Charter Bank of New Mexico v. Wertheim, Case No. 1:13-cv-00050 (U.S. District Court for the District of New Mexico Filed Jan. 17. 2013).
  46. FDIC as Receiver for Columbia River Bank v. Christensen, Case No. 3:13-cv-00109-PK (U.S. District Court for the District of Oregon Filed Jan. 18, 2013).
  47. FDIC as Receiver for First National Bank of Georgia v. Lipham, Case No. 3:13-cv-000140-TCB (U.S. District Court for the Northern District of Georgia Filed Jan. 25, 2013).
  48. FDIC as Receiver for American Marine Bank v. Townsend, Case No. 3:2013-cv-05055 (U.S. District Court for the Western District of Washington Filed Jan 25, 2013).
  49. FDIC as Receiver for Security Savings Bank v. Jones, Case No. 2:2013-cv-00168 (U.S. District Court for the District of Nevada Filed Jan. 31, 2013).
  50. FDIC as Receiver for Orion Bank v. Aultman, Case No. 2:13-cv-00058-UA-SPC (U.S. District Court for the Middle District of Florida Filed Jan. 29, 2013).
  51. FDIC as Receiver for LaJolla Bank FSB v. Colbourne, Case No. 3:2013-cv-00351 (U.S. District Court for the Southern District of California Filed Feb. 13, 2013).
  52. FDIC as Receiver for Carson River Community Bank v. Jacobs, Case No. 3:13-cv-00084-RCJ-VPC (U.S. District Court for the District of Nevada Filed Feb. 22, 2013).
  53. FDIC as Receiver for InBank v. Elmore, Case No. 1:13-cv-01767 (U.S. District Court for the Northern District of Illinois Filed Mar. 7, 2013).
  54. FDIC as Receiver for New Century Bank v. Pantazelos, Case No. 1:13-cv-02246 (U.S. District Court, Northern District of Illinois Filed Mar. 26, 2013).
  55. FDIC as Receiver for Riverside National Bank v. Smith, Case No. 2:2013-cv-14151 (U.S. District Court for the Southern District of Florida Filed Apr. 15, 2013).
  56. FDIC as Receiver for City Bank v. Hanson, Case No. 2:13-cv-00671-JCC (U.S. District Court for the Western District of Washington Filed Apr. 15, 2013).
  57. FDIC as Receiver for Bank of Wyoming v. Yarrington, Case No. 13-cv-89F (U.S. District Court for the District of Wyoming Filed Apr. 23, 2013).
  58. FDIC as Receiver for Peninsula Bank v. Portnoy, Case No. 8:13-cv-01124-JDW (U.S. District Court for the Middle District of Florida Filed Apr. 25, 2013).
  59. FDIC as Receiver for Frontier Bank v. Clementz, Case No. 2:2013-cv-00737 (U.S. District Court for the Western District of Washington Filed Apr. 26, 2013).
  60. FDIC as Receiver for Eurobank v. Arrillaga-Torrns, Case No. 3:13-cv-01328 (U.S. District Court for the District of Puerto Rico Filed Apr. 26, 2013).
  61. FDIC as Receiver for Champion Bank v DiMaria, Case No. 4:13-cv-00816 (U.S. District Court for the Eastern District of Missouri Filed Apr. 29, 2013).
  62. FDIC as Receiver for Midwest Bank and Trust Company v. Giancola, Case No. 1:13-cv-03230 (U.S. District Court for the Northern District of Illinois Filed Apr. 30, 2013).
  63. FDIC as Receiver for Irwin Union Bank v. Kime, Case No. 1:13-cv-00782-TWP-DML (U.S. District Court for the Southern District of Indiana Filed May 13, 2013).
  64. FDIC as Receiver for Vantus Bank v. Backhaus, Case No. 5:13-cv-04046-MWB (U.S. District Court for the Northern District of Iowa Filed May 20, 2013).
  65. FDIC as Receiver for Sun West Bank v. Delaney, Case No. 2:13-cv-00924-JCM-VCF (U.S. District Court for the District of Nevada Filed May 24, 2013).
  66. FDIC as Receiver for TierOne Bank v. Lundstrum, Case No. 8:2013-cv-00168 (U.S. District Court for the District of Nebraska Filed May 31, 2013).
  67. FDIC as Receiver for Sun American Bank v. Castro, Case No. 9: 2013-cv-80596 (U.S. District Court for the Southern District of Florida Filed June 10, 2013).
  68. FDIC as Receiver for Advanta Bank Corp. v. Alter, Case No. 2:2013-cv-03361 (U.S. District Court for the Eastern District of Pennsylvania Filed June 17, 2013).
  69. FDIC as Receiver for Southern Community Bank v. Cameron, Case No. 3:2013-cv-00102 (U.S. District Court for the Northern District of Georgia Filed June 18, 2013).
  70. FDIC as Receiver for Woodlands Bank v. Crowe, Case No. 2013-cv-01946 (U.S. District Court for the District of South Carolina Filed Jul. 15, 2013).
  71. FDIC as Receiver for Crescent Bank v. Boggus, Case No. 2013-cv-00162 (U.S. District Court for the Northern District of Georgia Filed Jul. 19, 2013).
  72. FDIC as Receiver for Williamsburg First National Bank v. Chandler, Case No. 2013-cv-02010 (U.S.  District Court for the District of South Carolina Filed Jul. 22, 2013).
  73. FDIC as Receiver for Wakulla Bank v. Dodson, Case No.4:2013-cv-00416 (U.S. District Court for the Northern District of Florida Filed Jul. 31, 2013).
  74. FDIC as Receiver for Ravenswood Bank v. Thorsen, Case No. 1:2013-cv-05530 (U.S. District Court for the Northern District of Illinois Filed Aug. 2, 2013).
  75. FDIC as Receiver for First State Bank v. Copenhaver, Case No. 8:2013-cv-02037 (U.S. District Court for the Middle District of Florida Filed Aug. 6, 2013).
  76. FDIC as Receiver for Affinity Bank of Ventura v. McGuire, Case No. CV13-05754-JAK(MANx) (U.S. District Court for the Central District of California Filed Aug. 8, 2013).
  77. FDIC as Receiver for Shorebank v. Amy, Case No. 1:2013-cv-05888 (U.S. District Court for the Northern District of Illinois Filed Aug. 16, 2013).
  78. FDIC as Receiver for Butte Community Bank v. Ching, Case No. 2:2013-cv-01710 (U.S. District Court for the Eastern District of California Filed Aug. 19, 2013).
  79. FDIC as Receiver for Sonoma Valley Bank v. Switzer, Case No. cv 13-03834 (U.S. District Court for the Northern District of California Filed Aug. 19, 2013).
  80. FDIC as Receiver for Security Bank of Bibb County v. Bridges, Case No. 5:13-cv-00347 (U.S. District Court for the Middle District of Georgia Filed Sept. 16, 2013).
  81. FDIC as Receiver for Centennial Bank v. Williams, Case No. 2:2013-cv-00883 (U.S. District Court of Utah Filed Sept. 27, 2013).
  82. FDIC as Receiver for Progress Bank of Florida v. Rummel, Case No. 8:13-cv-02692 (U.S. District Court for the Middle District of Florida Filed Oct. 18, 2013).
  83. FDIC as Receiver for Hillcrest Bank of Florida v. Bayer, Case No. 2:13-cv-00752 (U.S. District Court for the Middle District of Florida Filed Oct. 22, 2013).
  84. FDIC as Receiver for Darby Bank v Bowden, Case No 4:2013-cv-00245 (U.S. District Court for the Southern District of Georgia Filed Nov. 8, 2013).
  85. FDIC as Receiver for Oglethorpe Bank v. Cross-McKinley, Case No. 2:14-cv-00002-LGW (U.S. District Court for the Southern District of Georgia Filed Jan. 9, 2014).
  86. FDIC as Receiver for United Western Bank v. Berling, Case No. 1:2014-cv-00137 (U.S. District Court for the District of Colorado Filed Jan. 17, 2014).
  87. FDIC as Receiver for First Community Bank v. Dee, Case No. 1:2014-cv-00066 (U.S. District Court for the District of New Mexico Filed Jan. 23, 2014).
  88. FDIC as Receiver for Tamalpais Bank v Garwood, Case No. 3:14-cv-00390 (U.S. District Court for the Northern District of California Filed Jan. 27, 2014).
  89. FDIC as Receiver for First Regional Bank v. Edwards, Case No 2:2014-cv-00668 (U.S. District Court for the Central District of California Filed Jan. 28, 2014).
  90. FDIC as Receiver for Habersham Bank v. Stovall, Case No. 2:14-cv-00029 (U.S. District Court for the Northern District of Georgia Filed Feb. 14, 2014).
  91. FDIC as Receiver for Bradford Bank v. Arthur, Case No. 1:14-cv-00604 (U.S. District Court for the District of Maryland Filed Feb. 28, 2014).
  92. FDIC as Receiver for Century Security Bank v. McClung, Case No. 1:2014-cv-00764 (U.S. District Court for the Northern District of Georgia Filed Mar. 14, 2014).
  93. FDIC as Receiver for McIntosh Bank v. Burson, Case No. 3:2014-cv-00033 (U.S. District Court for the Northern District of Georgia Filed Mar. 14, 2014).
  94. FDIC as Receiver for Superior Bank v. Hall, Case No. 8:2014-cv-00834 (U.S. District Court for the Middle District of Florida Filed Apr. 9, 2014).


Last Updated 4/11/2014 communications@fdic.gov