Pavlik and Smithey v. Federal Deposit Insurance Company, et al.
Krislov Law obtains landmark recovery recognizing depositors as equity owners of mutual savings bank. While depositors in Credit Unions and Mutual Savings Banks are structurally regarded as the equity owners, never before has that equity ownership been recognized by the FDIC, to pay depositors any of the profits realized from seized institutions.
Years after the Pilsen-based Universal Federal (mutual) Savings Bank was seized by the FDIC due to a massive check-kiting scheme, we sued the FDIC to force the agency to turn over some $2 million received from the wrongdoer, with the obligation to turn over future recoveries to former depositors.
Accordingly, all depositors have now been made whole, including depositors who had deposits above the FDIC-insured amount. Depositors have also received substantial payments representing their proportionate deposit equity in the Bank.
The settlement, approved by U.S. District Judge Amy J. St. Eve, requires the FDIC to account for and pay over any further restitution received, for the duration of the 15 years restitution agreement.
The December 21, 2011 article in the Chicago Journal explains more about the case.