Note: The City of Wildwood, Missouri (Beneficiary) sued the Federal Deposit Insurance Company (FDIC), a U.S. government agency, challenging FDIC's disallowance of Beneficiary's attempt to draw on three LCs totaling US$ 323,612.98, issued by Premier Bank (Issuer), which is in receivership with FDIC. FDIC contends that the LCs were repudiated at the time of Issuer's closing.

FDIC moved to dismiss on the grounds that Beneficiary improperly pled its claims against FDIC in its corporate capacity as overseer of insured depository institutions, rather than its receivership capacity to marshal assets of failed institutions as receiver for benefits of creditors. The U.S. District Court for the Western District of Missouri, Western Division, Laughrey J., denied the motion to dismiss.

The Judge noted that by statute the FDIC could not be sued in its corporate capacity but only in its capacity as receiver. She stated that the recital in the complaint that "the FDIC, as a receiver for Premier Bank, disallowed the claims ... contains the heart of Beneficiary's claim against FDIC and illustrates a clear intent to sue FDIC in its receivership capacity for its disallowance of plaintiff's claims involving letters of credit."



The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.