Banks & Banking – Tort/Negligence – FIRREA – Corporate – Officer & Director Liability – Gross Negligence – Business Judgment RuleFederal Deposit Insurance Corp. v. Willetts Plaintiff alleges that the defendant-officers and directors of Cooperative Bank permitted a lax loan approval process, that state and federal regulators repeatedly warned defendants about risks associated with a high concentration in speculative loans, and that defendants continued to focus on real estate lending after 2007 when they should have known that the real estate market was slowing. Plaintiff has sufficiently alleged gross negligence; furthermore, it is too early in this action to determine whether the business judgment rule will protect defendants from claims of ordinary negligence.
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Published: April 26, 2012
Time posted: 10:12 am
Tags: Banks & Banking, Business Judgment Rule, Corporate, FIRREA, Gross Negligence, Officer & Director Liability, Tort/Negligence