Authored by Scott St. Amand of Rogers TowersIn April of 2010, the Office of the Comptroller of the Currency closed First National Bank Myrtle Beach, S.C., a wholly-owned subsidiary of Beach First National Bancshares, a bank holding company, and named the FDIC as its receiver. As a consequence of the bank’s failure, Bancshares filed for Chapter 7 bankruptcy. Shortly thereafter, the Trustee filed an adversary proceeding asserting a derivative claim for breach of fiduciary duty and negligence against the officers and directors of the subsidiary bank for injury allegedly caused to the subsidiary bank.
As some readers may know, a bankruptcy Trustee succeeds to all rights of the debtor, including the right to assert any cause of action belonging to the debtor. Absent statutory modification, this power includes the right to assert the derivative claims of Bancshares (as the subsidiary bank’s sole shareholder) against the directors in their capacity as officers and directors of the subsidiary bank. However, under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), the FDIC, when appointed receiver of a bank, succeeds to all rights, titles, powers and privileges of the insured depository institution, and of any stockholder of such institution with respect to such institution and the assets of the institution.