Cleveland partner Eric Goodman was quoted in the April 26, 2010, Crain's Cleveland Business article, "FDIC Seeks $518M from AmTrust's Parent Firm."
According to the article, the Federal Deposit Insurance Corp. (FDIC) claims it is owed more than $500 million from the holding company of the former AmTrust Bank for failing to be a "source of strength" to the bank. In pleadings related to the bankruptcy case of AmTrust Financial Corp.—now known as AmFin Financial Corp.—FDIC attorneys said by agreeing to a Nov. 19, 2008, cease-and-desist order that required the bank to have a prescribed amount of capital, AmFin committed to keeping AmTrust Bank well-capitalized. AmFin therefore should be accountable for at least $518.5 million, which was AmTrust Bank's capital deficit as of Sept. 30, 2009, according to the article.
Goodman, who is representing the FDIC, said because the agency's claim is based on Sept. 30, 2009, numbers, the amount the FDIC is owed might increase due to more losses that may have occurred before AmTrust Bank's Dec. 4 failure. Because of the capital maintenance commitment to the Office of Thrift Supervision that the FDIC maintains was made when the holding company agreed to the cease-and-desist order, Goodman said, the holding company is "required to immediately cure the deficit" before it can move forward with the rest of the bankruptcy.