June 11--Former officials at Chicago's failed New City Bank last month settled a lawsuit filed by the Federal Deposit Insurance Corp.
In a lawsuit filed in federal court in March 2015, the FDIC had said the 2012 failure of the $71 million-asset bank resulted in at least $6.6 million in losses for the financial regulator.
The lawsuit was settled for $2.5 million, according to a document on file with the FDIC.
Defendants included William Beavers, a former Cook County commissioner. In 2013, he was also convicted of tax evasion. Beavers was on the bank's board of directors from December 2006 to February 2012, according to the FDIC lawsuit.
He was among 14 individuals named in the settlement. Insurer Continental Casualty was also mentioned.
When most banks fail, another institution steps in to acquire their assets and deposits. The FDIC couldn't find a buyer for New City.
"New City was established in 2003, and its original operating plan was to serve the needs of small- and midsize businesses in downtown Chicago," the FDIC lawsuit said. "Soon after opening, however, the bank's target lending area expanded, and its commercial real estate loan" portfolio grew rapidly, with the institution focusing much of its lending in that sector.
The bank's directors once included the late former Illinois Supreme Court Justice Mary Ann McMorrow, a lawyer for the defendants said when the lawsuit was filed.
byerak@tribpub.com
