IndyMac Bancorp trustee asks court to disallow $5 billion FDIC claim

By Caroline Salls

Pittsburgh, June 12 - IndyMac Bancorp Inc. Chapter 7 trustee Alfred H. Siegel filed a complaint Thursday against the Federal Deposit Insurance Corp. in objection to the FDIC's more than $5 billion proof of claim filed in its role as receiver of IndyMac Bank, according to a filing with the U.S. Bankruptcy Court for the Central District of California.

Specifically, Siegel is asking the court to disallow or subordinate the FDIC's claim that IndyMac Bank is entitled to in excess of $5 billion based on alleged tax related entitlements, capital maintenance obligations, claims based on avoidance and/or recovery of supposed fraudulent transfers and tort based claims.

The trustee alleged in the complaint that IndyMac Bank took actions that have "resulted in injury to creditors or the conferring of an unfair advantage on the FDIC as successor to IndyMac Bank."

"The interests of IndyMac Bank were improperly placed ahead of the interests of Bancorp and its creditors," Siegel alleged in the complaint.

In addition, the trustee said the FDIC claim should be subordinated to the claims of its general unsecured creditors, arguing that the unsecured creditors are less likely to receive the full amounts they are owed because of the bank's misconduct, including making misleading statements about its financial condition, prospects and business strategy risks.

"Based on the materially misleading statements and the failures to disclose, Bancorp's general unsecured creditors were induced to extend credit to Bancorp without knowledge of IndyMac Bank's or the Bancorp's true financial condition," the trustee said in the complaint.

Siegel said in the complaint that he filed a proof of claim on behalf of the company in October 2008 seeking more than $754.44 million based on the downstreaming of assets from Bancorp to IndyMac Bank and the FDIC's unilateral repudiation of a tax sharing agreement.

According to the complaint, the FDIC decided to disallow the trustee's claim. Siegel said he plans to file a lawsuit asking the U.S. District Court for the District of Columbia to allow the claim.

IndyMac filed for bankruptcy on July 31, 2008. Its Chapter 7 case number is 08-21752.

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