In a departure from its typical litigation practice, the FDIC has sued not only the directors and officers who voted for failed loans, but also the senior loan officer who originated those same loans. The claims arise from the failure of New Century Bank, which was placed into receivership in April 2010. The FDIC filed its complaint against the former D&Os on March 26, 2013, just a few weeks prior to the expiration of the three-year limitations period. For a copy of the FDIC’s complaint, click here.
The FDIC seeks to recover damages in excess of $33 million in connection with fourteen bad credits. According to the FDIC’s complaint, each of the fourteen loans was approved in violation of the Bank’s loan policy. Common violations of the loan policy included: (i) failure to establish adequate debt repayment programs; (ii) extension of credit in excess of permitted LTV ratioRead More