Temple-Inland Crippled GFG Spinoff, Trustee Says

Law360, New York (August 22, 2011, 10:31 PM EDT) -- The trustee for one of the largest bank failures in U.S. history sued Guaranty Financial Group Inc.'s former parent Temple-Inland Inc. in Texas on Monday for allegedly siphoning the bank's assets and forcing it to acquire risky mortgage-backed securities before spinning off the “doomed-to-fail” entity.

Kenneth L. Tepper, the trustee and Federal Deposit Insurance Corp. assignee, is seeking to recoup more than $1 billion that Guaranty's creditors lost after the bank collapsed, allegedly due to Temple-Inland treating it, “not as a traditional bank, but rather as...
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