Washington, DC (February 18, 2011) - Paul, Hastings, Janofsky & Walker LLP, a leading global law firm, announced today that the firm has filed suit on behalf of the outside directors of the Denver-based holding company United Western Bancorp against the Office of Thrift Supervision (“OTS”) and the Federal Deposit Insurance Corporation (“FDIC”) for improperly seizing United Western Bank (“United Western”).
On January 21, 2011, the OTS appointed the FDIC as receiver for United Western, alleging that United Western engaged in unsafe and unsound practices, that a liquidity crisis was imminent, and that United Western’s capital restoration plan was not acceptable.
and Kirby Behre
, who are leading the Paul Hastings team on behalf of United Western’s outside directors, have asserted a claim filed in the U.S. District Court for the District of Columbia, that the appointment of the FDIC as receiver of the bank was unlawful, arbitrary, and capricious, and therefore must be reversed.
“The decision to pursue action against the OTS and FDIC represents the first time since the onset of the current financial crisis that a bank placed into federal receivership has asked a District Court to reverse this action,” said Mr. Kaplan. “The OTS and the FDIC profoundly abused their enormous powers to protect the banking system by forcing an economically viable bank to fail. United Western Bank posed no imminent danger to the FDIC’s insurance fund and United Western’s parent company was well down the path towards securing a private sector recapitalization,” added Mr. Kaplan. “Receivership under these circumstances was not an appropriate course of action, especially when the rest of the banking industry will now be required to replenish any losses incurred by the Deposit Insurance Fund,” said Mr. Behre.
Paul, Hastings, Janofsky & Walker is a leading global law firm with offices in Asia, Europe, and the United States. We provide innovative legal solutions to financial institutions and Fortune 500 companies. Please visit www.paulhastings.com for more information.