Supreme Court Declines to Hear Case on Treatment of Goodwill
WASHINGTON -- The Supreme Court has declined to hear the appeal of a Michigan thrift in a case alleging that the federal government reneged on a contractual commitment.
First Federal Bancorp of Pontiac, which acquired a Florida thrift in 1988 from the government, sought to rescind the purchase after the 1989 thrift-bailout law forced it to remove $2.7 million in goodwill from capital.
Lower courts had rejected First Federal's complaint against the Office of Thrift Supervision and Federal Deposit Insurance Corp. The Supreme Court's action lets those rulings stand.
Lower Courts Found No Harm
The courts reasoned that because the acquired thrift, Citizens Federal Savings Bank of Jacksonville, remains in business, First Federal was not harmed. First Federal, with $1.1 billion in assets, also owns First Federal Savings Bank and Trust of Michigan.
The First Federal case was one of two before the Supreme Court challenging the change in treatment of supervisory goodwill, which pushed numerous thrifts toward insolvency. The court has not decided whether to consider the case of Franklin Federal Savings Bank in Tennessee.