Colonial Asks Court To Deny FDIC Grab At $38M

Law360, New York (January 12, 2010, 5:16 PM EST) -- The Colonial Bancgroup Inc., holding company for the failed Colonial Bank, has asked a bankruptcy court to stop the Federal Deposit Insurance Corp.’s efforts to seize millions Bancgroup transferred to external accounts before its bank tanked.

Colonial Bancgroup filed a motion Monday in the U.S. Bankruptcy Court for the Middle District of Alabama, asking the court to deny an October request from the FDIC to use the holding company's deposits, valued at about $38.4 million, as setoff against the more than $1 billion the FDIC will...
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