FDIC Sues Three WaMu Execs and Their Wives, Settles with Outside Directors

As recently as this past Monday, commentators were grumbling that the FDIC is moving too slowly in pursue claims against former directors and officers of failed banks. The FDIC has responded in dramatic fashion with a March 16, 2011 lawsuit filing in the Western District of Washington against three...

As Banks Fail, Will Insurance Coverage Lawsuits Follow?

One of the many distinctive traits of the litigation that surrounded the S&L crisis in the late 80s and early 90s was the plethora of lawsuits between the FDIC (and other federal banking regulators), on the one hand, and the failed banks' insurers, on the other hand, over the interpretation...

FDIC's Latest Failed Bank Lawsuit Defendants Include Outside Directors and D&O Insurers; Also, Number of Problem Banks Declines

On August 22, 2011, when the FDIC filed a lawsuit related to the collapse of Silverton Bank, which is Georgia's largest failed bank, the named defendants included not only bank officers that the regulators allege are responsible for the bank's failure, but also the bank's former outside...

FDIC Failed Bank Litigation and the Insured vs. Insured Exclusion

An inevitable part of the current wave of bank failures has been the FDIC's filing of lawsuits against former directors and officers of the failed institutions. And though the FDIC's initiation of this litigation has been gradual, the lawsuits have now started to accumulate in significant...

A Time-Ripened Tale of Toxic Assets, a Corporate Spin-Out and a Failed Bank

Guaranty Bank of Austin, Texas's August 21, 2009 closure is the fourth-largest bank failure during the current wave of bank failures and the tenth largest bank failure in U.S. history. The bank's failure, which came just 15 months after its publicly traded holding company spun out of Temple...

Two Questions: Bank Closures Winding Down? FDIC WaMu Lawsuit Settled?

Whether the process is just winding down for the year or the process is actually winding down for good, the bank closure rate has recently fallen off dramatically. The FDIC has not taken over any banks for three weeks straight, with no bank closure at all so far during the month of December. And...

FDIC's Latest Failed Bank Lawsuit Includes D&O Insurer Defendant

In the FDIC's latest lawsuit filed in its role as receiver of a failed bank, the FDIC not only named as defendants nineteen former directors and officers of the failed bank, but also included as defendants seventeen of their spouses and the failed bank's D&O insurer. A copy of the FDIC's...

LIBOR-Scandal Litigation: After Federal Court Dismissal, Schwab Pursues State Court Suit

When Southern District of New York Judge Naomi Reice Buchwald entered her order in the consolidated LIBOR litigation on March 29, 2013, she dismissed the plaintiffs' antitrust and RICO claims against the LIBOR rate-setting banks, and she also declined to exercise supplemental jurisdiction over...

Perkins Coie LLP on Britt v. Twin City: Private Equity Firms Should Review the Scope of the Insurance Purchased to Cover Claims Against Them and the Individuals They Place as Directors

Excerpt: The recent decision in Britt v. Twin City Fire Insurance Co. , C.A. No. 8SACV 12-1355-JST (JPRx), slip op. (C.D. Cal. June 26, 2013), highlights some important insurance considerations for private equity funds and the individuals they place as directors or officers at portfolio companies...

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...

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...