A California jury returned a verdict of $169 million against three former IndyMac Bancorp Inc. executives. The verdict was awarded to the FDIC, which brought the suit in 2010 after taking over the failed bank. The jury determined that the former executives were negligent in making loans to homebuilders while the real estate market was declining and that the executives breached their fiduciary duty.
The FDIC alleged the former executives caused $500 million in losses for IndyMac in its homebuilder loan portfolio by continuing to push for growth in loan production without proper regard for creditworthiness and market conditions.
The verdict set out damages relating to 23 separate loans made by the former executives and IndyMac. The loans were various types of acquisition and construction loans made to homebuilders and developers. The jury awarded damages on the various loans in amounts ranging from $919,697 to $21,951,203.
The case is FDIC v. Van Dellen, 10-04915, U.S. District Court, Central District of California (Los Angeles).
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