Before its landmark collapse in May 2009, Silverton Bank of Atlanta, Georgia, provided its board of directors with extravagant perks, including private jets, according to the Federal Deposit Insurance Corp (FDIC).

 

FDIC lawyers are now suing Silverton’s 17 former directors and officers for $71 million to recoup some of the $386 million that the federal agency had to spend after the bank became the largest failure in state history.

 

In its complaint filed in federal court, the FDIC accuses the institution’s leadership of “expansive and extravagant spending on unnecessary items” after the economy headed toward recession.

 

Silverton financed the purchase of two new corporate jets, a new aircraft hangar, and a “large and lavish new office building.” The bank also employed at least eight private pilots to fly directors and prospective clients to meetings and other locations.

 

Silverton’s directors weren’t too good at running their business affairs either, aggressively expanding their loan underwriting with “a complete disregard of a declining economy.” In the words of the FDIC’s complaint, the officers and directors engaged in “robotically voting for approval of transactions without exercising any business judgment.”

Tom Bryan, the CEO of Silverton until a month before it was seized by regulators, when last heard from, was a senior vice-president and regional sales manager at Duncan-Williams, an investment bank headquartered in Memphis.

-Noel Brinkerhoff, David Wallechinsky

 

FDIC Sues Directors for Crash of Bank (by Dan McCue, Courthouse News Service)

FDIC v. Tom Bryan et al. (U.S. District Court, Northern Georgia, Atlanta) (pdf)

Georgia and Colorado Bank Failures Cost Americans $2.5 Billion (by Noel Brinkerhoff, AllGov)

Suit Points to Bank’s Then-CEO (by J. Scott Trubey, Atlanta Journal-Constitution)