The former officers and directors for Midwest Bank & Trust have reached a $26.5 million settlement with the Federal Deposit Insurance Corp. over charges of negligence during the financial crisis.
The settlement, reached late last month, puts to bed another one of the slew of legal cases stemming from the mortgage bust. The agreement was reported by
None of the 18 former officers and directors are said to have admitted liability in the Chicago-based bank's failure, which occurred in May 2010. The agreement did not specify whether any of the defendants would contribute to the settlement from insurance policies, the Crain's story said.
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Despite aggressive efforts to stay alive, Midwest Bank and Trust Co. was closed late Friday by Illinois regulators. The failure of the $3.2 billion-asset, Chicago-area bank came on a night when the Federal Deposit Insurance Corp. also found buyers for three other institutions, bringing the year's failure total to 72.
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WASHINGTON -- The Federal Deposit Insurance Corp. on Thursday won the right to pursue a lawsuit against several large financial institutions accused of selling tainted mortgage securities to a company that has since failed.
May 19
The April 2013 lawsuit charged Midwest leadership with making $100 million in bad loans, and said it did not properly determine whether the borrowers could repay.
Additionally, the suit claimed that bank held "unusually" large investments Fannie Mae and Freddie Mac securities, which were wiped out in 2008 when the firms were placed into conservatorship.
Midwest, which $3.2 billion in assets at the time of its failure, was absorbed by the $26 billion-asset FirstMerit in Akron, Ohio.
First Merit is
Kristin Broughton contributed to this story.