News & Events

News & Events

7.2.2013

Lessons From the Wake of Economic Collapse: Avoiding Personal Liability in Loan Origination and Restructuring

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Lane Powell attorneys Greg Fox and Dan Kittle co-authored an article in the May/June 2013 issue of Washington Bankers Association’s (“WBA”) Issues and Answers magazine titled “Lessons From the Wake of Economic Collapse: Avoiding Personal Liability in Loan Origination and Restructuring.” In the article, Fox and Kittle discussed the increase of lawsuits against directors and officers for personal liability by the Federal Deposit Insurance Corporation, as well as the importance for banks to implement sound practices and procedures as they relate to loan origination and restructuring.

Although today’s lending economy continues to follow a fairly steady path toward stability, the recent economic downturn has given rise to an increasing number of lawsuits by the Federal Deposit Insurance Corporation (“FDIC”) seeking to impose personal liability against directors and officers of failed financial institutions. In 2009, the FDIC received authorization to pursue 11 lawsuits against directors and officers for personal liability, while in 2012, the FDIC received authorization to pursue 369 personal liability lawsuits against directors and officers. As of April 15, the FDIC was on pace to authorize more than 400 lawsuits against directors and officers of failed institutions this year.

Read the article (PDF).