Financials Restructuring Partners III, Ltd., et al, v. Riverside Banking Company

In Financials Restructuring Partners III, Ltd., et al, v. Riverside Banking Company, Index No. 650934/2013, the Court addressed and rejected these arguments. There the Court found that seizure of the Bank by the Office of the Comptroller of the Currency and appointment of the FDIC as receiver constituted Events of Default under 5.01(e) and (f) of the Indenture presented there. In so holding, this Court noted that: "any other ruling would write 5.01(e) out of the Indenture. Courts do not have power to place banks into bankruptcy. Federal regulators have "the exclusive power to appoint a conservator or receiver for a Federal savings association" (12 USC 1464(d)(2)(B)). After such appointment, the association may seek judicial review. . . . Having failed to seek judicial review, Riverside's claim that it did not "consent" to appointment of a receiver within the meaning of Indenture 5.01(f) must be rejected." (Riverside, 2014 N.Y.Slip Op. 30013[U] [January 2, 2015]).