Attorneys filed Monday a stipulation in U.S. District Court in which they agreed to dismiss the suit against eight former directors of Peoples, one of whom also was an officer of the bank.
Each party will bear their own costs and expenses, according to the stipulation; otherwise, details of the settlement were not available Monday, said Greg Hernandez with the FDIC.
Charles Wachter, who represented the bankers against the FDIC, said his clients were confident they would’ve prevailed at trial, but opted to settle the case to avoid the cost and disruption of a trial they expected to last around a month. There is no liability or adjudication attached, and the suit can never be reopened.
The suit was filed in late 2012 against Panama City Mayor Greg Brudnicki, Joseph Chapman III, Henry Futrell, Philip Griffitts, John Middlemas, Rodney Morris, Raymond Powell and John Wilson II, who were all members of the bank’s board of directors until Peoples failed in late 2009. Powell also was the bank’s chief executive officer and president.
Wachter said the case was settled for a fraction of the damages the FDIC sought in its suit, but he declined to give specific details Monday.
“At this point, I’m not at liberty to get into the financial details of the settlement,” Wachter said.
In the suit, the FDIC alleged the former directors negligently approved several loans to developers who were unable to repay when the housing market bubble burst.
Peoples First had operated successfully for 30 years lending to developers, Wachter said, and they were prepared to defend each of the 11 loans with testimony from experts in the fields of appraisal, economics and academia.
Wachter pointed out the case is distinct from a trial currently playing out in federal court in
“There was not one whiff of fraud,” Wachter said. “There was not one whiff of self-dealing … nobody personally benefitted.”