FDIC Files Suit Against Former Georgia Bank

Even as fewer banks fail nationally, the ""FDIC"":http://www.fdic.gov/ recently filed suit against former 11 directors and officers of the institution for which it now serves as receiver, with the goal to collect $23.92 million in damages from the defendants.

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Citing negligence and oversight failure, the federal agency filed suit against Alpha Bank & Trust, an Alpharetta, Georgia-based bank closed by state regulators in 2008.

The FDIC claimed $214.5 million in approximate costs to the Deposit Insurance Fund, which it said resulted from a swath of bad commercial real estate loans, 11 in total, along with two other loans the bank made to unqualified borrowers.

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According to the suite, the defendants signed off on 13 of the loans made by the bank to a number of borrowers ""despite plainly inadequate, incomplete, or outdated financials of the borrowers and/or guarantors"" without regard for the ability to repay by any one borrower.

""Defendants approved the Loss Loans despite underwriting deficiencies and loan policy violations that were or should have been readily apparent to even a casual reviewer,"" the FDIC alleged in the complaint.

The FDIC accused the former directors and officers of violating statutory limits, scrimping on borrower financial information, neglecting improper appraisals, and looking the other way when it came to a borrower's ""questionable character,"" among other allegations.

Numbering 11 in all, the former directors and officers include ex-chairman James Blackwell, onetime president and CEO Joseph Briner, former EVP Robert Skeen III, and David Michael Sleeth, who served as the CFO.

Greg Hernandez, a spokesperson for the FDIC, declined to comment for the story given the pending legislation.

The suit tracks a pledge by the FDIC to pursue culpable former bank officials. Agency directors signed off on suits to recoup over $2 billion from some 80 former directors and officers from failed institutions last year, according to the ""_Los Angeles Times_"":http://articles.latimes.com/2010/nov/10/business/la-fi-fdic-lawsuits-20101111.