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principal amount of the Bank loan petitioners owed to Moncor
Bank. Moncor Bank apparently received a total of $200,537 in
installment payments from purchasers of cabin lots.
On August 30, 1985, the U.S. Comptroller of the Currency
declared Moncor Bank insolvent, and the Federal Deposit Insurance
Corporation (FDIC) became the receiver of Moncor Bank. By letter
dated September 2, 1985, the FDIC informed petitioners of Moncor
Bank's insolvency and advised petitioners to make payments on the
Bank loan to the FDIC as receiver of Moncor Bank.
The FDIC refused to accept any further assignment from
petitioners of cabin lot sales contracts as repayment on the Bank
loan and ordered petitioners to suspend sales of cabin lots.
Petitioners complied with the FDIC's suspension order and did not
sell any more cabin lots, but petitioners did not make any
subsequent payments on the Bank loan.
In September of 1985, petitioners filed a lawsuit against
the FDIC for breach of contract, contesting their liability to
the FDIC for the $799,463 principal amount allegedly due on the
Bank loan ($1 million less $200,537 in actual payments received
by Moncor Bank equals $799,463) and seeking to require the FDIC
to accept assignment of cabin lot installment sales contracts as
payment on the Bank loan pursuant to petitioners' agreement with
Moncor Bank.
On December 19, 1988, petitioners and the FDIC settled their
dispute over petitioners' remaining liability on the Bank loan
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