Federal Deposit Insurance v. Smith

ORDER

Family Federal Savings & Loan Association (Family Federal) was a federally insured thrift headquartered at Dallas, Oregon. On January 10, 1990, the Office of Thrift Supervision determined that Family Federal was insolvent. The Office, therefore, appointed the Resolution Trust Corporation as receiver for Family Federal, and on that date, RTC purchased all of Family Federal’s claims against its directors and officers. Over three years later, on September 8, 1993, RTC, as successor in interest to Family Federal, filed this action against Kenneth Smith, Richard Hoffman, Robert Bateman, William Dalton, Jack Darley, Stanley Hammer, and Robert Lorence. It alleged causes of action for negligence, breach of fiduciary duty, and breach of contract.

In January of 1984, Smith, Dalton, Darley, Hammer and Lorence were members of the board of directors of Family Federal. Bate-man became a member in 1984, after the death of another member. At all relevant times, they constituted the majority of the board of directors of Family Federal. Hoffman was the Family Federal’s Loan Manager at all relevant times.

In January of 1984, the Board of Directors approved the purchase of a $2,000,000…