May 28, 2015

Arguments in North Carolina business judgment rule case featured in Bloomberg Law

2 min

A May 28, 2015 Bloomberg Law article featured a story on Venable's arguments on behalf of Cooperative Bank before the Fourth Circuit Court of Appeals. Last year, a federal judge ruled against the Federal Deposit Insurance Corporation (FDIC), applied the business judgment rule and granted summary judgment in favor of the former directors and officers of the bank seized by the FDIC in 2009. The FDIC appealed the decision and the Fourth Circuit is expected to rule later this summer.

Arguing on behalf of the bank's directors and officers Venable partner Thomas E. Gilbertsen said "the conduct of the defendants has to be measured on a broad spectrum, with gross negligence as the standard for personal liability." He added, "There is no evidence of gross negligence in this case." Gilbertsen said Cooperative Bank and its officers was caught in the "cataclysmic financial collapse" of recent years and "were swept under" a tide regulators failed to foresee. "They were heavily invested in real estate, in their communities, not elsewhere, and that's what community banks do," he added. "This case and this issue, this assault on the business judgment rule, affects all directors and officers in every corporation, large and small, in North Carolina."

In addition to Gilbertsen, the bank is represented by partner Ronald R. Glancz, counsel Meredith L. Boylan, and associate Michael P. Bracken.