Franklin Financial v. Resolution Trust Corp.

OVERVIEW

In these cases we decide whether the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. § 1821 , allows the Resolution Trust Corporation (“RTC”) to repudiate a lease 117 days after the RTC’s appointment as receiver. We hold that it does and, therefore, reverse.

Defendant RTC, individually and in its capacity as receiver of the Benjamin Franklin Savings & Loan Association (“Franklin”), appeals from a judgment of the district court. The district court held on summary judgment that the RTC improperly repudiated the lease of Franklin’s headquarters building owned by Franklin Financial Associates (“FFA”), and awarded FFA $6 million in damages. The RTC appeals from the district court’s order that the repudiation of the lease was untimely and also raises numerous issues relating to damages. Because we find summary judgment should not have been granted in favor of FFA, we do not reach the damages issue. FFA crossappeals the district court’s award of attorneys’ fees to the RTC after determining that the RTC was a prevailing party in the Franklin I litigation after FFA voluntarily dismissed that action. We have jurisdiction for both appeals…