The plaintiff is seeking hundreds of millions of dollars, alleging the three failed in their responsibilities in operating Irwin Union Bank. Chief Financial Officer Gregory Ehlinger and Executive Vice President Thomas Washburn have also been named in the lawsuit, which alleges the three defendants made risky home and commercial mortgage loans.
Paul Freeman, Executive Vice President for Member Services of the Indiana Bankers Association, says suing those involved with a failing bank has become popular as the nation’s financial crisis continues, but stresses a lawsuit does not mean criminal activity is being suggested.
“There is probably a standard operating procedure in these type of failures that the lawyers are going to at least make an attempt to name officers and directors in suit in an effort to recover whatever might be available for either shareholders or other interested parties,” Freeman says.
The trustee, Elliott Levin, is also suing the Federal Deposit Insurance Corporation for its alleged part in Irwin Union‘s collapse.