When a bank fails and the FDIC repudiates a construction loan—ending further “draws” or disbursements—the borrowers can’t setoff damages they suffer because of repudiation to reduce the amount of debt they owe under the loan. That’s what a panel of judges from the US Court of Appeals for the 11th Circuit decided in Placida v…. Continue Reading
Category Archives: FDIC & Bank Failures
Subscribe to FDIC & Bank Failures RSS FeedFDIC vs. Construction Lenders Jury Verdict: IndyMac Bankers Liable for $169 Million
Posted in California, Construction Finance and Insolvency, FDIC & Bank Failures, StatesJurors awarded this $169M verdict (PDF) against three former IndyMac Bank executives for originating dubious construction and development loans. It happened last Friday in Los Angeles at the US District Court for the Central District of California. $169M Verdict Against Former Indyac Bank Executives In their original complaint (PDF), the FDIC alleged: That the former… Continue Reading
How to Stop a Bank Run
Posted in FDIC & Bank FailuresThe recent trouble surrounding banks in Greece got NPR’s Planet Money team to produce piece on how to stop a bank run. There’s 3 traditional tools. To learn about them we have to go back to the bank failures in the Great Depression and before. The story starts at this laundromat, once the Bronx branch… Continue Reading
D’Oench, Duhme Doctrine Applies to Failed Bank Subsidiaries
Posted in D'Oench, Duhme, FDIC & Bank FailuresFederal court decides that the subsidiary of a failed bank, not the receiver for the failed bank itself, may also use the D’Oench, Duhme doctrine and 12 USC § 1823(e) to stop borrower and developer claims fostered by a construction loan gone bad–SJ Properties Suites v. Specialty Finance Group, LLC
How Does D’Oench, Duhme Affect Joint Venture and Partnership Agreements: ORL, LLC v. Hancock Bank
Posted in D'Oench, Duhme, FDIC & Bank FailuresJoint venture and partnership agreements may be unenforceable against a failed banks and its successors if the the agreement is not written and otherwise doesn’t comply with D’Oench, Duhme and 12 U.S.C. §1823(e)
Does D’Oench, Duhme Apply to Employment Contract Claims: Ortiz-Hernandez v. Westernbank of Puerto Rico
Posted in D'Oench, Duhme, FDIC & Bank FailuresHow the D’Oench, Duhme doctrine and 12 USC §1823(e) denied enforcement of the Christmas bonus agreement of a failed bank employee
How Does D’Oench, Duhme Apply to Failed Credit Unions: Campbell v. Castle Stone Homes
Posted in D'Oench, Duhme, FDIC & Bank FailuresLike failed banks, the D’Oench, Duhme doctrine applies to claims against the National Credit Union Administration Board (“NCUAB”) acting as liquidator for a failed credit union. And D’Oench, Duhme has a statutory companion for failed credit unions in the Federal Credit Union Act too: 12 U.S.C. §1787(p)(2). A federal court in Utah recently used the D’Oench, Duhme doctrine… Continue Reading
FDIC Sues Georgia Lawyers For Professional Malpractice in Closing Development Loans
Posted in Construction Finance and Insolvency, FDIC & Bank FailuresFDIC sues failed bank’s former lawyers for professional malpractice in the closing of acquisition and development loans
D’Oench, Duhme Active in California
Posted in California, D'Oench, Duhme, FDIC & Bank FailuresIn California the D’Oench, Duhme doctrine stops contract reformation on loan documents
How Does D’Oench, Duhme Affect Fraud Claims
Posted in Construction Finance and Insolvency, D'Oench, Duhme, FDIC & Bank FailuresThe D’Oench, Duhme doctrine’s statutory companion 12 U.S.C. §1823(e) bars guarantors’ fraud defenses and claims against the FDIC and later assignee of loan from a failed bank
FDIC Sues Former Heritage Community Bankers in Chicago
Posted in FDIC & Bank FailuresFDIC sues Heritage Community Bank’s former Chairman and CEO, along with ten other former officers and directors, for gross negligence and breach of fiduciary duties that allegedly led to the bank’s failure in 2009
Can You Sue the FDIC for Wrongful Contract Repudiation
Posted in FDIC & Bank FailuresMore on FDIC contract repudiation and whether counterparties on the receiving end of repudiation can sue for wrongful repudiation
FDIC’s First Failed Bank Officer and Director Liability Lawsuits of the Great Recession
Posted in Construction Finance and Insolvency, FDIC & Bank FailuresFDIC sues former IndyMac officers and directors for bank mismanagement
How an FDIC Loss-Sharing Agreement Really Works – With Video
Posted in Construction Finance and Insolvency, FDIC & Bank FailuresHow FDIC Loss-Sharing Agreements: a video overview and articles that go into more technical detail
When the FDIC Takes Over a Failed Bank: Business Pitfalls and Opportunities
Posted in Construction Finance and Insolvency, D'Oench, Duhme, FDIC & Bank FailuresArticle about how the FDIC takeover of a bank affects borrowers, customers, asset purchasers, and others
FDIC Removal to Federal Court
Posted in D'Oench, Duhme, FDIC & Bank Failures, Mechanics LiensFederal Statutes that let the FDIC move pending cases from state to federal courts
FDIC: Interview of Chairwoman Sheila Bair
Posted in Construction Finance and Insolvency, FDIC & Bank FailuresFDIC Chairwoman Sheila Bair appeared for an interview on CNBC today. Press play below to tune-in to her remarks on: Increased lending activity The financial regulatory reform bill pending in Congress The pace of bank failures and when they’ll peak Resumption of scuitizations
FDIC Statute of Limitations Extension: Private Assignees Can Extend Too
Posted in Assignments, Construction Finance and Insolvency, FDIC & Bank Failures, Statute of LimitationsHow private purchasers of loans from the FDIC enjoy longer limitations periods for enforcement against borrowers and guarantors just like the FDIC does
D’Oench, Duhme Doctrine Recap, Wrap Up and Ways To Avoid Trouble
Posted in Construction Finance and Insolvency, D'Oench, Duhme, FDIC & Bank FailuresRecapping the rule of D’Oench, Duhme, why have the rule, and how to stay out of its way
The FDIC’s D’Oench, Duhme Use Restriction Policy
Posted in Construction Finance and Insolvency, D'Oench, Duhme, FDIC & Bank FailuresThe FDIC’s 1997 policy tempering their use of the D’Oench, Duhme doctrine and Section 13(e) of the Federal Deposit Insurance Act
Fortifying Your Work-Out Against Future Bank Failure Presentation
Posted in Construction Finance and Insolvency, D'Oench, Duhme, Events, Presentations, and Webinars, FDIC & Bank FailuresPresentation on D’Oench, Duhme and Federal Deposit Insurance Act §13(e) to Chicago’s South Side Business Association – handouts Included
Ding, Dong the D’Oench, Duhme Doctrine Is Dead, Maybe
Posted in Charts, Construction Finance and Insolvency, D'Oench, Duhme, FDIC & Bank FailuresA chart showing where D’Oench and the federal holder in due course rule are dead in the wake of FIRREA, O’Melvany & Myers v. FDIC and Atherton v. FDIC
Friday Night Lights: Inside an FDIC Bank Takeover With 60 Minutes
Posted in FDIC & Bank Failures, Illinois, States60 Minutes segment going inside the FDIC’s takeover and resolution of Chicago’s Heritage Community Bank and purchase by MB Financial
Federal Holder In Due Course Rule for FDIC Loan Collections and Loan Sales
Posted in Construction Finance and Insolvency, D'Oench, Duhme, FDIC & Bank FailuresThe Federal Holder In Due Course Rule: the FDIC, and those who buy loans from them, become holders in due course of loans where others aren’t