Southern Bank & Trust files lawsuit against Community Bank
Virginia Beach partner Jonathan Hauser and Troutman Sanders were mentioned in an August 21 Virginian-Pilot article about a lawsuit he filed on behalf of client Southern Bank & Trust against another bank, Community Bank, alleging that Community Bank had improperly restructured a distressed $8.7 million loan in violation of a participation agreement between the two banks, as Community Bank secretly pursued a merger with a West Virginia bank.
The lawsuit, filed in mid-August in Virginia Beach Circuit Court, is the latest legal entanglement Southern Bank has been ensnared in involving an asset from the failed Bank of the Commonwealth, whose assets it purchased almost a year ago. Regulators shut down the Norfolk-based Bank of the Commonwealth last fall amid mounting losses and Southern Bank purchased Commonwealth’s assets through a loss-share agreement with the Federal Deposit Insurance Corp.
Southern Bank, which is being represented by Hauser in the management of that troubled portfolio, is seeking to recover on assets not covered by the FDIC through legal actions such as this one.