FDIC Hits Travelers Unit With $11.7M Coverage Suit

Law360, New York (June 2, 2011, 1:05 PM EDT) -- ANB Financial NA receiver the Federal Deposit Insurance Corp. sued a Travelers Cos. Inc. affiliate Wednesday in Arkansas, saying it should hand over $11.7 million for failing to cover losses caused by a corrupt employee of the bank.

The suit claims that William Burton Hemm, an ANB executive officer responsible for lending and branch supervision, colluded with two borrowers to defraud ANB, formerly known as Arkansas National Bank.

The FDIC was appointed receiver of ANB in May 2008 after the company was declared insolvent.

"Hemm dishonestly...
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