The Federal Deposit Insurance Corp. is seeking $29.9 million in damages in a lawsuit against 11 former officers and directors of failed First National Bank of Georgia. The lawsuit cites gross negligence and a failure to follow sound practices in approving 14 real estate loans that led to large losses.

The regulators charge that the bank's leaders allowed excessive concentrations of risky development loans, did not properly vet loans and failed to heed warnings from bank examiners.

The defendants include: former CEO Howard B. Lipham III; former President Randall F. Eaves; former Executive Vice President Mary M. Covington; and directors Grady W. Cole, Richard A. Duncan, W. Thomas Green Jr., Lemuel G. Joyner, R. David Perry, Thomas T. Richards, J. Thomas Vance and Charles M. Willis Sr., according to the Atlanta Journal-Constitution.

First National, located in Carrollton, a suburb west of Atlanta, failed in January 2010. Georgia leads the nation in bank failures since mid-2008 and the case is at least the 15th liability lawsuit filed against former insiders of a failed Georgia bank, according to the newspaper.

Mary Gill, with Alston & Bird, the law firm representing the defendants, said in a statement that the defendants “faithfully fulfilled their responsibilities and at all times acted in the best interest of the bank." The claims are "without merit," the firm said.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry