Matter of Liquidation of American City B. & T. Co., NA, Civ. A. No. 75-C-609.
| Decision Date | 21 October 1975 |
| Docket Number | Civ. A. No. 75-C-609. |
| Parties | In the Matter of the Liquidation of AMERICAN CITY BANK & TRUST COMPANY, N.A. a National Banking Association. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Robert J. Loots, Gibbs, Roper, Loots & Williams, Milwaukee, Wis., for petitioner.
The Federal Deposit Insurance Corporation ("FDIC"), as Receiver of the American City Bank & Trust Company, N.A., a National Banking Association, ("ACB"), has petitioned this Court for an ex parte order authorizing the sale of assets, transfer of liabilities, and transfer of trust powers of ACB to another banking association. Such an arrangement is commonly known as a purchase and assumption transaction. Requests for ex parte orders should only be ordered in extraordinary circumstances where, on balance, the right to be heard is outweighed by countervailing considerations. After careful consideration I have determined that such approval is appropriate in this case. For the reasons set forth below, the petition will be granted.
Prior to the close of business on October 21, 1975, ACB was a national banking association organized and existing pursuant to the laws of the United States, 12 U.S.C. § 21 et seq. As such, the business affairs of ACB were subject to the supervision of the Office of the Comptroller of the Currency, a bureau of the United States Treasury Department. ACB maintains its corporate and banking offices in Milwaukee, Wisconsin.
At the close of business on October 21, 1975, pursuant to the provisions of 12 U.S.C. § 191, ACB was declared to be insolvent by the Comptroller of the Currency. The Comptroller thereupon terminated ACB's powers and existence as a national banking association. Immediately thereafter, the Comptroller appointed the FDIC the receiver of ACB, acting pursuant to 12 U.S.C. §§ 191, 1821(c). The FDIC immediately undertook its duties as receiver and took possession and control of ACB's affairs, assets and property. This petition by the FDIC for approval of the purchase and assumption transaction followed.
The FDIC's appointment is a statutory as opposed to a court-ordered receivership, the Comptroller acting pursuant to 12 U.S.C. §§ 191, 1821(c). There is authority to the effect that such action by the Comptroller is entirely discretionary and, thus, not subject to judicial review. B. V. Emery & Co. v. Wilkinson, 72 F.2d 10 (10th Cir. 1934); Wannamaker v. Edisto National Bank, 62 F.2d 696 (4th Cir. 1933); Liberty National Bank v. McIntosh, 16 F.2d 906 (4th Cir. 1927), cert. dismissed, 273 U.S. 769, 783, 47 S.Ct. 571, 71 L.Ed. 890. The better view, however, is that the Comptroller's judgment is final unless it clearly appears that the action is arbitrary and taken in bad faith. United States Savings Bank v. Morgenthau, 66 U.S.App.D.C. 234, 85 F.2d 811 (1936), cert. denied, 299 U.S. 605, 57 S.Ct. 232, 81 L.Ed. 446, rehearing denied, 301 U.S. 666, 57 S.Ct. 793, 81 L.Ed. 1365. There is nothing in the record to indicate that the Comptroller's action is in bad faith.
More troublesome is the question of approving the ex parte petition of the FDIC for the purchase and assumption transaction. The Court has determined, however, that the petition is appropriate in these circumstances.
From the early days of the Republic it was apparent that receiverships of national banks are a unique system created by Congress under the money and currency clause of the Constitution. McCulloch v. The State of Maryland et al., 17 U.S. (4 Wheat.) 316, 4 L.Ed. 579 (1819). This system includes the appointment of the FDIC as receiver, the marshalling and compromising of assets, the satisfaction of liabilities and distributions to creditors, all to facilitate the collections and distributions without harmful delay. Dunn v. O'Connor, 67 U.S.App.D.C. 76, 89 F.2d 820 (1937). The procedures, rights and duties set forth in the statute are exclusive and mandatory. All persons interested in the liquidation of a national bank must look to this system for a definition of their rights and duties. Cook County National Bank v. United States, 107 U.S. 445, 448, 2 S.Ct. 561, 27 L.Ed. 537 (1882).
There can be no doubt that proceedings pursuant to 12...
To continue reading
Request your trial
-
Sinclair v. Hawke, 02-1979.
...1092-93 (D.C.Cir.1996); American Bank, N.A. v. Clarke, 933 F.2d 899, 903-04 (10th Cir.1991); In re Matter of Liquidation of Amer. City Bank & Trust Co., 402 F.Supp. 1229, 1231 (E.D.Wis.1975) (collecting cases). But many courts have dismissed damage actions against the OCC for wrongfully app......
-
Turner v. OFFICERS, DIR. & EMP. OF MID VALLEY BANK
...e.g., In re Receivership of Penn Square Bank, N.A., 556 F.Supp. 494, 497 (W.D.Okla.1983); In re Liquidation of American City Bank and Trust Company, N.A., 402 F.Supp. 1229, 1231 (E.D.Wisc.1975); In re Liquidation of Franklin National Bank, 381 F.Supp. 1390, 1393 Several courts have addresse......
-
Federal Deposit Ins. Corp. v. Grella, 485
...Cook Co. Nat'l Bank v. United States, 107 U.S. 445, 448, 25 S.Ct. 561, 27 L.Ed. 537 (1883); In Re Liquidation of American City Bank & Trust Co., N. A., 402 F.Supp. 1229, 1231 (E.D.Wis.1975); District of Columbia v. Wardell, 32 F.Supp. 769, 771-72 (D.D.C.1940), rev'd on other grounds, 74 U.S......
-
Federal Deposit Ins. Corp. v. Lesselyoung
...The purchase and assumption agreement was approved, ex parte, by this Court on October 21, 1975. Matter of American City Bank & Trust Company, N.A., 402 F.Supp. 1229 (E.D.Wis. 1975). Defendants have each asserted the same defenses, several of which were incorporated from the pleadings in Co......