Barnes v. Harris

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The Barnes Banking Company (the "Bank") had been placed into Federal Deposit Insurance Corporation ("FDIC") receivership in 2010. Three shareholders in Barnes Bancorporation (the "Holding Company"), parent of the failed bank, brought suit against the Holding Company and its officers and directors. The district court’s dismissal of their suit was on the basis that most of the claims advanced by the plaintiffs were owned solely by the FDIC under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), and the remaining allegations were insufficient to state a claim. The shareholders appealed the district court's decision, but the Tenth Circuit agreed: because almost all of the plaintiffs’ claims asserted injury to the Holding Company that was derivative of harm to the Bank, those claims belonged to the FDIC. Furthermore, the one theory of recovery advanced by plaintiffs that identified claims not owned by the FDIC under FIRREA (which involves the alleged misappropriation of $265,000), was pled in too conclusory a fashion. View "Barnes v. Harris" on Justia Law

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