FDIC sues 11 former insiders of failed Georgia bank
Federal regulators have sued 11 former officers and directors of a failed Villa Rica bank, accusing them of poor oversight and taking “unreasonable risks.”
The Federal Deposit Insurance Corp. said in the complaint filed Thursday that the former Community Bank of West Georgia (CBWG) officials “allowed irresponsible and unsustainable rapid asset growth” in real estate development and other risky types of loans, and failed to heed regulators’ warnings.
The lawsuit alleges deficiencies in 20 loans that resulted in losses of more than $16.8 million.
The suit, filed in U.S. District Court in Newnan, named as defendants former bank CEO Richard C. Hayden, former chief financial officer Delmas C. Lindsey and former chief credit officer Dwayne H. Myrick, as well as eight former members of the director loan committee.
Robert Ambler, an attorney for 10 of the defendants, said “the allegations are without merit and we will vigorously defend this case and seek dismissal.”
CBWG failed in June 2009, less than two weeks after bank officials asked state regulators to close the bank, and allegedly said they were “not capable of managing it any further,” the suit contends.
Georgia leads the nation in bank failures since mid-2008. The case is the 10th liability lawsuit filed against former insiders of a failed Georgia bank.
About the Author
J. Scott Trubey is the senior editor over business, climate and environment coverage at The Atlanta Journal-Constitution. He previously served as a business reporter for the AJC covering banking, real estate and economic development. He joined the AJC in 2010.
