Ex-Directors Sued In Bank Failure
By Michael Hall, The Brunswick News, Ga. | |
McClatchy-Tribune Information Services |
The 11 former board members of the now defunct
Board members failed to monitor lending, leading to "improperly approving millions of dollars in facially deficient loans" and encouraging an "excessive and irresponsible" concentration of questionable residential and commercial loans in what became a poor local real estate market, the 80-page lawsuit alleges.
The lawsuit sites 24 specific loans the
The questionable loans were made despite several warnings from bank examiners that underwriting deficiencies at
From 2007 to 2009, examiners warned that the bank's rapidly growing loan portfolio relied too heavily on risky commercial real estate lending to developers, making the bank vulnerable to collapse if the commercial real estate market tanked, the lawsuit says.
Some loans were made with guaranteed payback amounts that were less than the total borrowed, the lawsuit says.
During 2007 and 2008, the bank's portfolio "skyrocketed" by more than
"Despite this worsening trend, defendants continued to make loans to non-creditworthy borrowers," the lawsuit says.
During the same period, the suit says the bank's directors wasted assets by giving themselves perks, such as a
The lawsuit filed
Then board of directors member
She went on to say in her statement that "too much money was spent on unnecessary perks and benefits for the officers, employees and board members," the lawsuit says.
Former board member
Board member
Former board member
Cross-McKinley previously sued the
The defendants named in the lawsuit against
-- Reporter
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