02-08-2011, 09:57 PM
I am not an attorney, nor do I have a great fondness for them (except for my attorney, he kicks ass and he's hot as hell). This is kinda fucked up though:
By J. Scott Trubey
The Atlanta Journal-Constitution
"Federal regulators are suing a prominent Henry County law firm in connection with a bank failure, reflecting the government's widening legal efforts to recoup losses from Georgia’s banking meltdown.
The civil lawsuit against Smith Welch & Brittain and one of its partners, J. Mark Brittain, alleges malpractice in Brittain’s handling of certain loans that Neighborhood Community Bank made to a Henry developer from 2005 to 2007.
Neighborhood Community failed in June 2009, and its failure cost the Federal Deposit Insurance Corp.’s insurance fund an estimated $66.7 million.
The suit is the fourth brought by the FDIC in the wake of the state's 55 bank failures, the most in any state since mid-2008. Three are against law firms or lawyers.
Christine Mast, an Atlanta attorney representing Brittain and his firm, said in an e-mail that Neighborhood Community was to blame for its failure and that the loans in question “were at risk for default from the beginning.” The FDIC, she added, was seeking out “deep pockets” from which to recover losses.
The FDIC-led liability lawsuits in Georgia are part of an effort to restock the insurance fund that protects depositors.
Two law firms that did work for the failed Integrity Bank of Alpharetta were sued late last year by the FDIC for legal malpractice.
In January, eight bank insiders at Integrity Bank of Alpharetta — including state Sen. Jack Murphy, the new chairman of the Senate banking committee — were accused of gross negligence in a $70 million suit by the FDIC.
Experts predict more FDIC suits in failed bank cases as the government combs through the remains of institutions to try to recoup losses.
“This is the tip of the iceberg as far as the FDIC is concerned,” said Tony Plath, finance professor at the University of North Carolina at Charlotte.
Smith Welch & Brittain is the largest law firm in Henry County and among the most prominent Southside firms. Its client list includes Atlanta Motor Speedway, Wal-Mart Stores East, the cities of Locust Grove and Hampton and numerous banks, development firms and businesses.
In the Neighborhood Community case, the FDIC is seeking damages “in excess of $6 million,” plus legal fees.
The FDIC suit claims the bank hired Brittain to process loan documents for land purchases by Henry developer Jeff Grant. Brittain had previously, and also during the time of loans, served as a lawyer for Grant and companies he owned.
The suit says Grant misrepresented the price of property he wanted to buy.
In three instances, Grant obtained loans using an inflated property price and used the amount over the actual purchase price as collateral to the bank and put some of the funds into various companies he controlled.
Grant is not named as a defendant in the case. Attempts to contact him were not immediately successful.
In one case, the suit alleges Grant was to acquire a property for $3.36 million, with $625,960 deposited in a CD account. But the actual purchase price was $2.64 million, and the difference was used to fund the deposit and for one of Grant’s companies, the suit says.
Brittain, who worked for the bank in each of the cases, is accused of creating two conflicting sets of “settlement statements” to facilitate the plan.
Neighborhood Community was deeply troubled when the bank failed. In its last earnings statement, the bank said about one-third of its loan portfolio was either delinquent, in default or foreclosed.
The suit said bank officials discovered the alleged wrongdoing after Grant defaulted on various loans. The FDIC continued to pursue the case after Neighborhood Community failed.
“The FDIC went through a very deliberative process before deciding to bring this suit and we believe the claims are meritorious,” said Rickman Brown, an attorney with Dietrick, Evans, Scholz & Williams, who represents the FDIC in the case.
Mast, the defendants’ attorney, disagreed.
“When the bottom fell out of the market, the banks and now the FDIC had no choice but to cast about for sources of recovery, and unfortunately the lawyers, who are often perceived as the deep pockets, are targeted as if they were the insurers of the success of the loans,” she said in an e-mail. “In this case, those borrowers and guarantors who truly owe the money are largely left alone, and pre-litigation efforts to pull the veil off of the bank's underwriting and post-closing servicing of the loans has been resisted.”
A spokesman for the FDIC declined to comment about active litigation.
Negligence claims against attorneys and other outside contractors were actively pursued during the Savings and Loan crisis of the late 1980s and early 1990s, but haven’t yet been a large part of the current cycle of litigation, said Kevin LaCroix, an attorney and failed bank litigation expert with Oakbridge Insurance Services in Beachwood, Ohio.
Regulators filed suit in about a quarter of all bank failure cases in the S&L crisis.
“In that respect it is not surprising that the FDIC is setting about to pursue these kinds of claims now,” LaCroix said."
Should the FDIC be able to sue closing attorneys if the loans fail? That is total bullshit. It's another example of our government trying to take from people who have made a decent life to pay for the stupid mutherfuckers who made a mess of their own. Why should attorneys have to pay if their client defaulted? WTF?
This country needs to slam on the brakes RIGHT NOW. Be responsible for YOURSELF. If you default, pay that shit back $200 a month for the rest of your life and leave the rest of us the fuck alone.
I can't believe this happens. Jesus.
By J. Scott Trubey
The Atlanta Journal-Constitution
"Federal regulators are suing a prominent Henry County law firm in connection with a bank failure, reflecting the government's widening legal efforts to recoup losses from Georgia’s banking meltdown.
The civil lawsuit against Smith Welch & Brittain and one of its partners, J. Mark Brittain, alleges malpractice in Brittain’s handling of certain loans that Neighborhood Community Bank made to a Henry developer from 2005 to 2007.
Neighborhood Community failed in June 2009, and its failure cost the Federal Deposit Insurance Corp.’s insurance fund an estimated $66.7 million.
The suit is the fourth brought by the FDIC in the wake of the state's 55 bank failures, the most in any state since mid-2008. Three are against law firms or lawyers.
Christine Mast, an Atlanta attorney representing Brittain and his firm, said in an e-mail that Neighborhood Community was to blame for its failure and that the loans in question “were at risk for default from the beginning.” The FDIC, she added, was seeking out “deep pockets” from which to recover losses.
The FDIC-led liability lawsuits in Georgia are part of an effort to restock the insurance fund that protects depositors.
Two law firms that did work for the failed Integrity Bank of Alpharetta were sued late last year by the FDIC for legal malpractice.
In January, eight bank insiders at Integrity Bank of Alpharetta — including state Sen. Jack Murphy, the new chairman of the Senate banking committee — were accused of gross negligence in a $70 million suit by the FDIC.
Experts predict more FDIC suits in failed bank cases as the government combs through the remains of institutions to try to recoup losses.
“This is the tip of the iceberg as far as the FDIC is concerned,” said Tony Plath, finance professor at the University of North Carolina at Charlotte.
Smith Welch & Brittain is the largest law firm in Henry County and among the most prominent Southside firms. Its client list includes Atlanta Motor Speedway, Wal-Mart Stores East, the cities of Locust Grove and Hampton and numerous banks, development firms and businesses.
In the Neighborhood Community case, the FDIC is seeking damages “in excess of $6 million,” plus legal fees.
The FDIC suit claims the bank hired Brittain to process loan documents for land purchases by Henry developer Jeff Grant. Brittain had previously, and also during the time of loans, served as a lawyer for Grant and companies he owned.
The suit says Grant misrepresented the price of property he wanted to buy.
In three instances, Grant obtained loans using an inflated property price and used the amount over the actual purchase price as collateral to the bank and put some of the funds into various companies he controlled.
Grant is not named as a defendant in the case. Attempts to contact him were not immediately successful.
In one case, the suit alleges Grant was to acquire a property for $3.36 million, with $625,960 deposited in a CD account. But the actual purchase price was $2.64 million, and the difference was used to fund the deposit and for one of Grant’s companies, the suit says.
Brittain, who worked for the bank in each of the cases, is accused of creating two conflicting sets of “settlement statements” to facilitate the plan.
Neighborhood Community was deeply troubled when the bank failed. In its last earnings statement, the bank said about one-third of its loan portfolio was either delinquent, in default or foreclosed.
The suit said bank officials discovered the alleged wrongdoing after Grant defaulted on various loans. The FDIC continued to pursue the case after Neighborhood Community failed.
“The FDIC went through a very deliberative process before deciding to bring this suit and we believe the claims are meritorious,” said Rickman Brown, an attorney with Dietrick, Evans, Scholz & Williams, who represents the FDIC in the case.
Mast, the defendants’ attorney, disagreed.
“When the bottom fell out of the market, the banks and now the FDIC had no choice but to cast about for sources of recovery, and unfortunately the lawyers, who are often perceived as the deep pockets, are targeted as if they were the insurers of the success of the loans,” she said in an e-mail. “In this case, those borrowers and guarantors who truly owe the money are largely left alone, and pre-litigation efforts to pull the veil off of the bank's underwriting and post-closing servicing of the loans has been resisted.”
A spokesman for the FDIC declined to comment about active litigation.
Negligence claims against attorneys and other outside contractors were actively pursued during the Savings and Loan crisis of the late 1980s and early 1990s, but haven’t yet been a large part of the current cycle of litigation, said Kevin LaCroix, an attorney and failed bank litigation expert with Oakbridge Insurance Services in Beachwood, Ohio.
Regulators filed suit in about a quarter of all bank failure cases in the S&L crisis.
“In that respect it is not surprising that the FDIC is setting about to pursue these kinds of claims now,” LaCroix said."
Should the FDIC be able to sue closing attorneys if the loans fail? That is total bullshit. It's another example of our government trying to take from people who have made a decent life to pay for the stupid mutherfuckers who made a mess of their own. Why should attorneys have to pay if their client defaulted? WTF?
This country needs to slam on the brakes RIGHT NOW. Be responsible for YOURSELF. If you default, pay that shit back $200 a month for the rest of your life and leave the rest of us the fuck alone.
I can't believe this happens. Jesus.