Colonial BancGroup Inc. wants to recoup nearly $900 million it transferred to its failed Alabama banking subsidiary in the months before the bank's collapse.
In a lawsuit filed against the Federal Deposit Insurance Corp., which took over as receiver of Colonial Bank upon its failure last August, the former bank holding company said it is seeking to recover the payments it made before the bank's failure in order to boost its capital.
Colonial BancGroup said it was insolvent or undercapitalized at the time it made the payments, and it also raised the possibility that banking regulators encouraged the payments despite knowing that the troubled bank would be seized.
"Governmental regulatory agencies may have pressured and induced BancGroup to make one or more of the capital contributions at a time when such agencies knew or should have known that appointment of the FDIC receiver was likely or imminent," the holding company said in court papers.
Reached Tuesday, an FDIC spokesman said the agency does not comment on active litigation.
The lawsuit, filed Friday in U.S. District Court in Montgomery, Ala., is an updated version of a suit Colonial BancGroup brought against the FDIC in March.