First come the bank failures. Now come the lawsuits.
A group of shareholders who invested in failed Alpha Bank of Alpharetta has filed a lawsuit against the bank’s former board of directors, AJC reporter Paul Donsky writes. The suit alleges the directors failed to disclose important information about the bank’s financial condition as it hurtled toward closure in late 2008.
It’s one of the first director lawsuits to be filed in what experts predict will be a wave of similar legal actions as investors seek to recoup losses suffered during the state’s banking meltdown, Donsky reports. Most bank board members carry liability insurance, but policies have a deductible and total coverage at many small banks is often not that high.
Alpha was the second Georgia bank to fail during the current cycle, shut down by regulators in October 2008 after less than three years in business. At the time, more than a quarter of the bank’s loans were considered troubled, mostly tied to real estate