FDIC Shakes Ruling Over Colonial Setoff Transfer

Law360, New York (January 5, 2012, 8:41 PM EST) -- An Alabama federal judge on Wednesday vacated a bankruptcy court's January order preventing the Federal Deposit Insurance Corp. from using Colonial BancGroup Inc. funds transferred to BB&T Corp. to offset the more than $5 billion loss caused by BancGroup's failure.

U.S. District Judge Myron H. Thompson vacated the bankruptcy court's finding that the FDIC lost its right to use the funds after the transfer to BB&T, remanding for further consideration based on his conclusion that a purchase-and-asset agreement between the FDIC and BB&T did not destroy...
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