RFBN Obtains Dismissal of Bank from Adversary Proceeding

RFBN partner Edward P. Freud and associate Michael B. Bregman recently prevailed on a motion to dismiss in a complex adversary proceeding in bankruptcy court on behalf of a Chicago area lender.  The trustee brought an action for equitable subordination against the bank, who was the successor to the Federal Deposit Insurance Corporation as receiver for a failed bank.  The complaint alleged misconduct on the part of the failed institution and sought to hold RFBN’s client responsible.  The bank’s motion pursuant to Federal Rule of Civil Procedure 12(b)(1) sought dismissal of the complaint for lack of jurisdiction under the FDIC Act.  RFBN’s win extricated the bank from the proceeding with no liability.