Bank of America, N.A. is challenging the Federal Deposit Insurance Corporation's authority to knock out certain court claims against financial institutions under receivership by issuing a determination that they have "no value."
The lawsuit, filed July 22 in U.S. District Court for the District of Columbia, is part of Bank of America's more than three-year quest to recover $1.75 billion from the receivership estate of Colonial Bank, which collapsed in 2009. The case stems from the FDIC's April determination that unsecured claims against Colonial had "no value," meaning there wouldn't be enough assets recovered to pay.
