The Federal Deposit Insurance Corp. has filed a lawsuit against an executive at Renasant (RNST) in an effort to recoup money from a defaulted loan from the defunct Tennessee Commerce Bank.
The lawsuit, filed in District Court for the Middle District of Tennessee, claims that Harrison Crabtree, a senior vice president at Renasant, obtained a loan in March 2006 from Citizen Corp., which was run by his brother-in-law, Ed Lowery. The FDIC claims that, about 10 months later, Citizen sold the loan to Tennessee Commerce. The lawsuit was first reported by the Nashville Business Journal.
Lowery also accounted for $65 million, or 57%, of Tennessee Commerce's capital, surplus and profits. The FDIC has been the receiver of Tennessee Commerce since the Franklin, Tenn., bank's failure in January 2012. Citizen filed for Chapter 11 bankruptcy in November 2011.
The lawsuit claims that the FDIC notified Crabtree about the defaulted loan last May, but he still "failed to satisfy his debt obligation." As the current holder and owner of the loan, FDIC says it "has suffered damages and is entitled to an award of the principal amount," which is $166,021.
The FDIC is also seeking payment on accrued and unpaid interest and other fees.