Presenting a live 90 ‐ minute webinar with interactive Q&A Bank Executives Under Heightened g Scrutiny by the FDIC Defending FDIC Lawsuits and Agency Enforcement Actions and Maximizing D&O Insurance Coverage TUES DAY, OCTOBER 9, 2012 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Today s faculty features: Mary C. Gill, Partner, Alston & Bird , Atlanta S teven C. Morrison, Counsel, Professional Liability/ Financial Crimes Group, FDIC , Jacksonville, Fla. Linda D. Kornfeld, Partner, Jenner & Block , Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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FDIC LITIGATION FDIC LITIGATION AGAINST BANK OFFICERS & DIRECTORS A POI N T / COU N T ERPOI N T DI SCU SSI ON A POI N T / COU N T ERPOI N T DI SCU SSI ON MARY C GILL MARY C. GILL STEVEN C. MORRISON STEVEN C MORRISON Partner – Alston & Bird LLP Counsel – FDIC Securities Litigation & Regulatory Enforcement Professional Liability & Financial Crimes mary.gill@alston.com stemorrison@fdic.gov
FDIC LITIGATION BY THE NUMBERS FDIC LITIGATION BY THE NUMBERS • FDIC has filed 33 lawsuits against former D&Os of closed banks in 10 states: closed banks in 10 states: • Georgia – 8 • California Illinois – 6 California, Illinois 6 • North Carolina – 3 • Puerto Rico – 2 • Arizona, Florida, Michigan, Kansas, Washington – 1 6
FDIC LITIGATION BY THE NUMBERS C G O U S • FDIC has authorized lawsuits against D&Os at an increasing pace: g p • 2009 – 11 • 2010 – 98 • 2011 – 264 • 9/2012 – 274 7
Date Filed Case Bank Defendants Claims Asserted Status (Court) Name/Number FDIC v. Van The former CEO, CCO and senior loan officers of 07/02/10 07/02/10 Dellen No Dellen, No. Negligence Negligence IndyMac IndyMac’s Homebuilder Division (HBD), each of Motion to dismiss denied (C.D. Cal.) 2:10-cv-04915- Breach of Fid. Duty whom was a member of HBD’s loan committee. DSF-SH Ten former officers and directors of Heritage FDIC v. Saphir, Settled Community, each of whom either served on the Negligence Heritage 11/01/10 No. 1:10-cv- loan committee or approved some of the loans at Gross Negligence Comm. (N.D. Ill.) 07009 Breach of Fid. Duty y Stipulation of Dismissal Filed issue as members of the Board, as well as the former CFO. Motion to Dismiss granted in FDIC v. Skow, part/denied in part. Negligence 01/14/11 Eight former directors of Integrity, each of whom No. 1:11-cv- Integrity Gross Negligence (N.D. Ga.) was a member of the bank’s loan committee. 0111 Breach of Fid. Duty Plaintiffs’ Motion to Strike granted in part FDIC v. Twelve former officers and directors of 1 st Negligence 1 st Appleton, No. Motion to Strike Affirmative 01/14/11 Centennial, each of whom either served on the Gross Negligence (C.D. Cal.) 2:11-cv-00476- Defenses granted Centennial bank’s loan committee or approved some of the Breach of Fid. Duty DDP-PLA loans at issue as members of the Board. Failure to Supervise FDIC v. Stark, Corn Belt Four former officers and directors of Corn Belt Settled 03/01/11 No. 3:11-cv- Negligence Bank & Bank & B&T, each of whom was a member of the bank s B&T each of whom was a member of the bank’s (C.D. Ill.) 03060-JBM- Gross Negligence Dismissed with prejudice Trust Co. loan committee. BGC Negligence Settled with former execs to 03/16/11 FDIC v. The former CEO, COO and senior loan officer of Gross Negligence Washington pay $64M in total (W.D. Killinger, No. Washington Mutual, as well as two of the former Breach of Fid. Duty Mutual Wash.) 2:11-cv-000459 executives’ spouses. Fraudulent Case dismissed Conveyance Conveyance Four former directors of Wheatland—two of whom Negligence FDIC v. were officers of the bank and two of whom were Motion to strike certain 05/05/11 Gross Negligence Spangler, No. Wheatland non-officer directors who served on the loan (N.D. Ill.) affirmative defenses denied Breach of Fid. Duty 10-cv-4288 committee—as well as the former CFO and senior Failure to Supervise loan officer. Amended Order denying FDIC v. Perry, 07/06/11 Defendant’s Motion to Dismiss IndyMac II No. 11-cv-5561- IndyMac’s former CEO. Negligence (C.D. Cal.) ODW-MRWx Pending interlocutory appeal 8
Date Filed Bank Case Name/Number Defendants Claims Asserted Status (Court) Thirteen former directors of Haven Trust— each of whom either served on the bank’s loan Negligence 07/14/11 FDIC v. Briscoe, No. Order granting in part/denying in g g p y g Haven Trust Haven Trust 1:2011-cv-002303 committee or approved some of the loans at committee or approved some of the loans at Gross Negligence Gross Negligence (N.D. Ga.) part Motion to Dismiss issue as members of the Board—as well as Breach of Fid. Duty the former CFO and senior loan officer. Negligence Answer Filed Michigan 08/08/11 FDIC v. Cuttle, No. 2:11-cv-13442-BAF MHB’s former Senior Loan Officer. Gross Negligence Heritage (E.D. Mich.) Pending Discovery Breach of Fid. Duty FDIC v. McCaffree, FDIC v. McCaffree, Former directors of Columbian; each of the Former directors of Columbian; each of the Negligence Negligence 08/09/11 (D. 08/09/11 (D O d Order granting Motions to Dismiss ti M ti t Di i C l Columbian bi No. 2:11-cv-02447- Defendant Directors was on Columbian’s loan Gross Negligence B&T Kan.) certain parties JAR-KGS committee. Breach of Fid. Duty Order denying Motion to Dismiss Negligence 08/10/11 FDIC v. Willetts, No. Seven former directors and two former officers Cooperative Gross Negligence 7:11-cv-00165-BO (E.D.N.C.) of Cooperative Bank in Wilmington, NC. Motion to Strike Defendants’ Fifth Breach of Fid. Duty Breach of Fid. Duty Affi Affirmative Defense ti D f Consent Judgment entered against one loan officer Corporate Waste FDIC v. Bryan, et al., Fifteen former directors and two former 08/22/11 Negligence Silverton No. 1:11-cv-02790- officers of Silverton Bank, as well as the , Motions to Dismiss filed (N D G (N.D. Ga.) ) Gross Negligence G N li JEC (N.D. Ga.) bank’s D&O insurers. Breach of Fid. Duty Stayed pending resolution of insurance coverage claims FDIC v. Gary A. Dorris and Phillip A. Two former inside directors of First National p Negligence g g FNB Nevada 08/23/11 (D. 08/23/11 (D Defendants entered consent Defendants entered consent Lamb, Bank Holding, First National Bank Arizona, Gross Negligence Ariz.) judgments for $20M and assigned No. 11-cv-01652- and First National Bank Nevada. Breach of Fid. Duty insurance rights to FDIC GMS Alpha FDIC v. Blackwell, 10/07/11 Negligence Motion to Dismiss granted in Bank & No. 11-cv-3423-RWS Eleven former directors of Alpha Bank. part/denied in part (N.D. Ga.) Gross Negligence (N.D. Ga.) (N D Ga ) Trust Trust Negligence FDIC v. Mahajan, et Seven former directors and two former loan 10/25/11 Gross Negligence Motions to Dismiss granted in part Mutual Bank al., No. 1:11-cv- officers of Mutual Bank, as well as former (N.D. Ill) Breach of Fid. Duty and denied in part 07590 (N.D. Ill.) General Counsel and his law firm. Legal Malpractice 9
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