Colonial BancGroup Challenges Capital Deal With FDIC

Law360, New York (December 16, 2009, 3:47 PM EST) -- Failed bank holding company Colonial BancGroup Inc. has sued the Federal Deposit Insurance Corp. in an effort to void an agreement on capital maintenance requirements it reached with the FDIC earlier this year, but wasn't able to fulfill.

Colonial BancGroup filed an adversary complaint against the FDIC on Tuesday in the U.S. Bankruptcy Court for the Middle District of Alabama, asking the court to declare its capital agreement with the FDIC void under Section 548 of the Bankruptcy Code, which deals with fraudulent transfers.

“The debtor...
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