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annum in excess of the aforementioned interest rate; and (4) in
the event petitioner defaults and the bank institutes a suit to
collect on the note, the bank shall be entitled to recover as
attorney’s fees 15 percent of the unpaid principal and interest,
and costs of suit.
During August 1990, the Office of the Comptroller of the
Currency declared the bank insolvent and appointed the Federal
Deposit Insurance Corporation (FDIC) as its receiver. The FDIC
later claimed that petitioner had defaulted under the terms and
conditions of the note by failing to repay principal and
interest.
During January 1994, the FDIC filed suit against petitioner
in U.S. District Court. The FDIC complaint alleged that
petitioner owed the following amounts with respect to the note:
(1) $1,752,384 in principal; (2) $381,934 in prejudgment interest
accrued as of February 15, 1993, with interest continuing to
accrue at a daily rate of $312 until paid; (3) a late charge of 2
percent per annum on the unpaid principal; and (4) attorney’s
fees in the amount of 15 percent of the unpaid balance of the
loan.2 The complaint alleged that, except for a $25,000 payment
by petitioner in November 1993, none of the above-described
amounts had been paid. The complaint also sought costs of suit.
2 All amounts are rounded to the nearest dollar.
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