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 Discussion on The reckless, irresponsible seizure of Washin View next topic
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autopost
Schumpeter Reincarnate


Joined: 24 May 2008
Posts: 46246

Re: Discussion on The reckless, irresponsible seizure of Washin
PostPosted: Sat Sep 27, 2008 4:00 am Reply with quoteBack to top

http://ml-implode.com/viewnews.....inWas.html
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Aristotle
Nitroglycerin


Joined: 05 Dec 2007
Posts: 573
Location: On a sand dune, sipping a cold soda

Taking of Creditor's Claims Against Assets
PostPosted: Sun Sep 28, 2008 12:48 am Reply with quoteBack to top

Some shareholders of failed savings and loans tried to argue "taking without just compensation" as a result of FSLIC seizure of entities during the savings and loan crisis. To my knowledge, no such lawsuit succeeded in forcing FSLIC or FDIC to disgorge any revenue from sales of the insolvent institutions. If somebody remembers such a case, I would love to hear about it.

It is possible that the well healed creditors of WaMu could file and prosecute a fairly straight forward takings case BUT they might be rowing upstream, given the Federal courts general reticence about interfering, after the fact, with the administrative "business judgment" of a Federal agency.

Personally, if I had been a major creditor, I would have tried to get injunctive relief against the OTS and FDIC before the seizure. I know that is really hard to do in Federal court, and that it flies in the fact of the principle that you cannot enjoin the government's exercise of a power held by them, but at least it might have made the OTS and FDIC think twice about what they were doing, as well as setting the stage for prosecuting the taking theory, after the seizure, but in the same case with the trial judge already educated and leaving no room for a laches argument against the creditors.

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Aristotle

As Yogi Berra said "It's like deja vu all over again."
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dave1969
Dud?


Joined: 28 Sep 2008
Posts: 1

Heres a link to a case from 1993
PostPosted: Sun Sep 28, 2008 11:22 am Reply with quoteBack to top

Heres a link to a case from 1993
http://query.nytimes.com/gst/f.....mp;emc=rss
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