Reviving a dead bank is as difficult as unscrambling an egg, but executives of the former United Western Bank are still trying to put their failed thrift back together again.

They sued the Office of Thrift Supervision in U.S. District Court in Washington, D.C., early last year, accusing the now-defunct regulator of acting improperly in shutting down the $2 billion-asset United Western. It had fresh equity lined up, and it should not have been closed and its assets and deposits sold to First Citizens Bank in Raleigh, N.C., the lawsuit says. The executives want the failure reversed and control of the Denver thrift returned to them.

A year later interest in the case has not waned. Some are following it because of its oddity, and others see the case as a potential game-changer for the banks that are still struggling and the more than 400 that have failed since 2008.

"A court ruling that gave relief to investors or whoever is suing because of a bank failure I think would make the regulators think twice about what they are doing," says Benjamin Shapiro, a partner in Belongia, Shapiro & Franklin LLP and a former regional counsel for the Federal Deposit Insurance Corp. in Chicago. "It would be extraordinary if they won."

Former Chief Executive Guy Gibson and other executives, acting on behalf of the failed thrift, might be nearing a breakthrough in getting the information they feel is critical to establishing that the failure was unwarranted.

The dispute centers on various correspondence between the OTS and the FDIC. The documents are privileged and their public release could jeopardize the way regulators make determinations about banks, including exams, regulators have argued in court filings.

The executives have been dogged in trying to get their hands on the documents.

"Defendants have admitted that the acting director [of the OTS] relied upon or considered the withheld documents in reaching the … decision to seize the bank," according to court documents they filed Thursday. "These documents must be available to the court to consider in evaluating whether the acting director's decision was arbitrary, capricious or unlawful."

The case has already been filled with plot twists and a changing cast of characters.

In June, the judge granted the FDIC's request to be removed as a defendant. In July, the Office of the Comptroller of the Currency replaced the OTS after those agencies merged. The OCC, FDIC, United Western executive team and its lawyers declined to comment for this story.

The tension between the parties intensified in the fall, as the executives sought from regulators as highly detailed an account of the administrative record as possible and accused the OCC of withholding information. The regulator spent months arguing that correspondence between the OTS and the FDIC involving their deliberative processes were privileged and cannot be made public.

February has been a particularly active month in the court fight.

On Feb. 9, Judge Amy Berman Jackson ordered the OCC to provide the executives with the FDIC correspondence. The FDIC then intervened in the case to protect the documents that the agency deems to be privileged. On Feb. 15, Jackson ordered the FDIC to either let the OCC release the documents or provide them to her in private. The FDIC is now proposing to release the documents to the executives, but under a protective order that would keep them from being made public, according to court filings.

The contents of the documents could prove to be juicy, but the regulators' assertion that such information is privileged is understandable, banking lawyers say.

"The theory is that you want the examiners to be able to speak freely amongst each other. That is the deliberative process," says Frank Bonaventure Jr., a partner at Ober, Kaler, Grimes & Shriver and a former lawyer with the OCC. "If those documents were made public it could have a chilling effect on the agencies."

Even with the potential breakthrough, the executives of United Western still face a steep uphill battle, Shapiro says.

"They are really going to have to show in a pretty substantial way that there was a serious abuse of power," Shapiro says. "This is not a very level playing field."

As the case has progressed, message boards for United Western Bancorp Inc., the thrift's former holding company, have brimmed with chatter of a possible cash settlement. Such an agreement would satisfy the head-scratching question of what the executives are really hoping to accomplish, since reassembling the thrift could be nearly impossible. Investors, do not hold your breath, lawyers say.

"I would not anticipate a cash settlement. I believe the OCC would take the position that they would litigate until a judicial determination," Bonaventure says.

Industry interest is high given the many clashes between bankers and regulators since the crisis — and the more that are to come.

"I'm intrigued to see someone fighting back after the failure," says Shapiro, who has attempted to get court injunctions to stop imminent failures on several occasions during the downturn.

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