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FDIC's Failed Bank Litigation Could Reach 86 Lawsuits, NERA Economic Consulting Projects

In a May 31, 2012 study of the FDIC failed bank litigation that contains a number of interesting observations and projections, NERA Economic Consulting projects at the current filing rate, the FDIC's failed bank litigation ultimately could total 86 lawsuits, or much as 20% of all banks that have failed as part of the current round of bank failures. The study, which is entitled "Trends in FDIC Professional Liability Litigation," can be found here.

The NERA study is based on its analysis of all failed bank lawsuits through the end of the first quarter of 2012, at which time there were 27 lawsuits involving 26 failed banks. (Through May 30, 2012, there have been a total of 30 lawsuits involving 29 institutions.)

Based on lawsuit filing patterns through March 31, 2012, NERA projects that ultimately the FDIC will file 86 lawsuits in total, representing about 20% of all bank failures. Through the end of the first quarter, the FDIC had authorized lawsuit against 54 institutions, suggesting that the FDIC had authorized about 60% of the number of lawsuits that NERA projects the FDIC will file. (After the end of 1Q12, the FDIC increased the number of authorized lawsuits; through May 15, 2012, the FDIC had authorized lawsuits involving 63 failed institutions, or about 73% of the number of lawsuits that NERA projects ultimately will be filed.)

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Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.

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