FDIC May Sue Failed Bank’s Officers Who Acted in Good Faith
On October 24th, the Eleventh Circuit vacated and remanded the dismissal of the FDIC’s lawsuit against the former officers and directors of a failed bank. As receiver for Integrity Bank, the FDIC sued the Bank’s directors and officers for ordinary negligence and for breach of fiduciary duty based on ordinary negligence. After certifying to the Georgia Supreme Court questions concerning whether under Georgia law, bank directors and officers could be subject to claims for ordinary negligence, the Eleventh Circuit reinstated the lawsuit. In light of an intervening case, the Georgia Supreme Court advised that a bank director or officer may violate the standard of care established by Georgia law even where he acts in good faith, where, with respect to the process by which he makes decisions, he fails to exercise the diligence, care, and skill of an ordinarily prudent person acting under similar circumstances in like positions. FDIC v. Skow.