On September 29th, the Federal Circuit held on behalf of a Winston & Strawn-represented party that the FDIC can be liable for breach of contract in a case stemming from the savings and loan crisis of the early 1980's. The Court held that the FDIC breached its contract with a bank, which ultimately failed, over the treatment of regulatory goodwill. The FDIC initially allowed the bank to count regulatory goodwill toward its capital requirements to induce the bank to acquire a failed bank and forestall a $696 million claim against the insurance fund. But the FDIC breached that agreement when it later required the bank to raise its tangible capital and when the bank failed to do so, revoked the bank's insurance, leading to its seizure. "The FDIC's responsibility for the 'safety and soundness' of the banks it regulates does not insulate it from the consequences of breach of contract." Slattery v. U.S.