The Federal Deposit Insurance Corp. said it will ask a federal judge to throw out a lawsuit filed by the former parent company of Colonial Bank, which was seized by federal regulators last year, over the rights to millions of dollars in tax refunds.
The FDIC said in a court filing Friday that it would ask a district court judge to dismiss the suit filed by the bank's former parent over the ownership of the disputed tax refunds.
Colonial BancGroup Inc., the failed thrift's corporate parent, has previously claimed that it's the rightful owner of about $166 million in tax refunds. The FDIC says the refunds are its property under federal law.
"In this case, Colonial Bank paid the substantial majority of taxes, incurred the substantial majority of losses and owns the substantial majority of tax refunds that might be recovered from taxing authorities," according to the filing with the U.S. Bankruptcy Court in Montgomery, Ala.