The Federal Deposit Insurance Corp. is suing a Georgia law firm and one partner for legal malpractice in connection with a $2.8 million loan that was among a portfolio of bad loans held by Integrity Bank when it failed.
Jampol, Schleicher, Jacobs & Papadakis, based in Alpharetta, Ga., and partner Michael E. Jacobs were sued in U.S. District Court in Atlanta.
The suit accuses Jacobs of mishandling the closing of a 2005 loan to a Smyrna, Ga., investment company. As a result, Integrity was unable to foreclose on a property that was supposed to have secured the loan, according to the FDIC's complaint.
The FDIC, as receiver for Integrity Bank, is seeking at least $1.1 million in actual damages, as well as unspecified punitive damages, legal fees and expenses from the firm and Jacobs.
Integrity Bank failed and was shut down by the FDIC in August 2008 for operating in "an unsafe and unsound manner.
Jampol Schleicher is now known as North Atlanta Law Group. Its four name partners, including Jacobs, are still the firm's principals, according to its Web site. Jacobs could not be immediately reached for comment.
The FDIC does not comment on active litigation. The agency previously has sued other law firms for malpractice in connection with bad loans in failed bank portfolios, including after a string of savings and loan institutions collapsed in the U.S. in the late 1980s and early 1990s.
