FDIC Still Trying to Recover $40 Million from Peoples First Directors

If the FDIC is to recover any money from the former directors of the failed Peoples First Community Bank, it will have to prove gross negligence, not just simple negligence.

FDIC is seeking to recover more than 40 million dollars lost when the bank failed. It claims the bank failed because the directors ignored warnings against making 11 major bad loans.

The two count lawsuit sought to find the directors liable under Florida's simple negligence standards, or the federal gross negligence standards.

Judge Richard Smoak dismissed the first count saying the state's simple negligence law provides Immunity for the directors.

However, Smoak says only seven of the eight directors will enjoy that immunity.

The eighth director, Raymond Powell, was also the banks C-E-O and bank officers aren’t immune. Smoak refused to throw out the second count, meaning the FDIC can still pursue damages, but it will be under the tougher gross negligence rules.

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