Mr Cooper Group Inc (COOP)

[deekshant]

Here is the ruling and case ref for accounting. You need to visit Sheila Bair's testimony "Wall Street and the Financial Crisis: The Role of Investment Banks" and refer to documents in the link. Please note this information may no longer be available as it was redacted. The best part is this evidence was admitted in BK court so it is admissible evidence for court purposes.
http://hsgac.senate.gov/public/_files/Financial_Crisis/041610Exhibits.pdf

Here is a case in bits and pieces where the plaintiffs claim for accounting was approved by the court against FDIC's own accounting and reporting practices and procedures

Date: 05/16/2012
CHARLES R. GOLDSTEIN, Chapter 7 Trustee for K Capital Corporation, Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Receiver of K Bank, Defendant.

K Capital is a “bank holding company” that wholly owned a Maryland bank, K Bank, as its subsidiary. The Trustee filed suit against the FDIC, in its capacity as receiver, seeking damages...


Factual Background
Under the alleged lending “scheme,” K Bank would typically lend a borrower between 80% and 90% of the value of real estate used as collateral to secure the loan, and would obtain a first-priority lien on the real estate collateral. Id. ¶ 13. Simultaneously, K Capital would extend a further loan to the borrower in an amount between 5% and 15% of the value of the collateral, and would receive a second-priority lien on the collateral. Id. ¶ 14. K Bank then would act as the servicer for both loans. Id. ¶ 16

The Trustee contends that the scheme was made possible because although the two entities were “nominally independent” of each other, they were “consolidated on an accounting and tax basis,” id. ¶ 8, and the “boards of K Capital and K Bank were populated by the same individuals who made decisions for both entities, despite conflicting interests.” Id. ¶ 18.

Based on these allegations, the Trustee, in the exercise of his duty to administer the estate of K Capital for the benefit of its creditors, see id. ¶ 5, asserts five claims against the FDIC in its capacity as receiver for K Bank: unjust enrichment (Count I); promissory estoppel (Count II); declaratory judgment (Count III); constructive trust (Count IV); and accounting (Count V).


Discussion
The FDIC also argues that the Trustee’s claim for an accounting (Count V) should meet the same fate, but this is not so clear.

The FDIC argues that another provision of FIRREA, 12 U.S.C. § 1821(d)(15), establishes the FDIC’s responsibilities to provide an accounting for a receivership.11 According to the FDIC, “plaintiff has no private right to compel any additional accounting.” Reply at 23.

Quote
11 Section 1821(d)(15) states, in part:

(A) In general The [FDIC] as conservator or receiver shall, consistent with the accounting and reporting practices and procedures established by the [FDIC], maintain a full accounting of each conservatorship and receivership or other disposition of institutions in default.

(B) Annual accounting or report With respect to each conservatorship or receivership to which the [FDIC] was appointed, the [FDIC] shall make an annual accounting or report, as appropriate, available to the Secretary of the Treasury, the Comptroller General of the United States, and the authority which appointed the [FDIC] as conservator or receiver


The FDIC also argues that Maryland law does not recognize a freestanding claim for an accounting, but rather treats accounting only as a remedy. Although assertion of an independent cause of action for accounting is no longer necessary in most cases, it has not been entirely abolished in Maryland.

Quote
(C) Availability of reports Any report prepared pursuant to subparagraph (B) shall be made available by the [FDIC] upon request to any shareholder of the depository institution for which the [FDIC] was appointed conservator or receiver or any other member of the public.

In the recent case of Polek v. J.P. Morgan Chase Bank, N.A., 424 Md. 333, 36 A.3d 399 (2012), decided after the FDIC’s Motion was briefed, the Maryland Court of Appeals stated: “In Maryland, a claim for an accounting is available when ‘one party is under [an] obligation to pay money to another based on facts and records that are known and kept exclusively by the party to whom the obligation is owed, or where there is a [confidential or] fiduciary relationship between the parties . . . .’”

In my view, the Maryland Court of Appeals’s recent reiteration in Polek of the principles of liability for accounting indicates that, in some circumstances, an accounting may serve as an - 25 - information, discovery is the remedy given to plaintiffs who prove they are entitled to an accounting.” Golub ex rel. Golub v. Cohen, 138 Md. App. 508, 523, 772 A.2d 880, 889 (2001).

Moreover, according to the complaint, the “FDIC, as receiver of K Bank, refuses to allow K Capital to inspect its account books, records, and documents so that it may determine the full extent of the proceeds of payments on the Joint Loans and/or collateral.” Id. ¶ 44.13 In my view, these allegations are sufficient to state a claim for accounting.14 Accordingly, I decline to dismiss Count V

Quote
14 Indeed, the Trustee would appear to have a basis for an accounting claim due to K Bank’s role as servicer of K Capital’s loans and the FDIC’s alleged refusal, as receiver, to provide the Trustee with documentation regarding those loans, independent of the Trustee’s claims that K Capital’s loans should be treated as joint loans with K Bank’s loans on a pari passu basis.

Quote
15 In Golub, supra, 138 Md. App. at 519-24, 772 A.2d at 887-90, the intermediate Maryland appellate court recognized that, because “discovery is the remedy given to plaintiffs who prove they are entitled to an accounting,” some bifurcation of discovery may be appropriate in a suit seeking accounting: “‘the first stage concerns whether there is any right to an accounting, and only if it is determined that there is such a right does the proceeding move on to the second stage, which comprises the actual accounting.’” Id. at 520, 772 A.2d at 887 (citation omitted).

Because the defenses are highly fact-specific, I will not resolve them at the pleading stage. Even if unclean hands or in pari delicto may be asserted against a bankruptcy trustee, the record before me is insufficient to determine whether the defenses should bar the Trustee’s claims in this case. The FDIC may reassert its defenses of unclean hands and in pari delicto after a factual record has been developed through discovery
http://www.mdd.uscourts.gov/Opinions/Opinions/CGoldsteinMTD.pdf

--------------------------------------------------------------------

CASE LAW(in bits and pieces)
First Pacific Bancorp, Inc., Plaintiff-Appellant, v. Federal Deposit Insurance Corporation, Receiver for First Pacific Bank, Defendant-Appellee.
Nos. 98-55634, 98-56942.
Decided: August 8, 2000

Please note: Plaintiff First Pacific Bancorp, Inc. (“Bancorp”), a Delaware corporation, is a one-bank holding company and the sole shareholder of First Pacific Bank (“the Bank”).

BACKGROUND
On August 7, 1990, the California Department of Banking appointed the Federal Deposit Insurance Corporation (“FDIC”) as Receiver for the Bank. Sometime around May 7, 1996, nearly six years after the Bank went into receivership, the FDIC notified Plaintiffs that it was terminating its receivership of the Bank. Along with the notice, the FDIC gave Plaintiffs two pages of unaudited financial information covering the period from August 10, 1990, through December 31, 1995. One report was entitled “Statement of Financial Condition,” and reported the assets, liabilities, and equity of the bank as of August 10, 1990 and as of December 31, 1995. The other statement, “Financial Condition and Liquidation Activity,” reported aggregated amounts of receipts and disbursements of the Bank between August 10, 1990, and December 31, 1995.1 The information contained in these two skeletal reports spanned a period of over five years. No detailed information was given for interim dates or time periods

Unsatisfied with the financial information provided by the FDIC and unable to obtain any further details of the Bank's financial picture through informal means, the Plaintiffs filed suit in the U.S. District Court for the Central District of California on October 4, 1996 (Bancorp I?). In their complaint, the Plaintiffs requested an accounting of the Bank's financial condition beginning with the FDIC's appointment as receiver.

Issue: The issue we confront is whether 12 U.S.C. § 1821(d)(15) gives Bancorp, as shareholder of a bank in receivership,2 a private right of action against the FDIC to compel it to provide a financial accounting in conformity with the FDIC's own accounting and reporting practices and procedures.

ISSUE:
The issue we confront is whether 12 U.S.C. § 1821(d)(15) gives Bancorp, as shareholder of a bank in receivership,2 a private right of action against the FDIC to compel it to provide a financial accounting in conformity with the FDIC's own accounting and reporting practices and procedures.

Our holding is limited to a finding that when inadequate or meaningless information is provided to a shareholder of a bank in receivership with the FDIC, the shareholders may sue for an accounting “consistent with the accounting practices and procedures established by the [FDIC].” -

ANALYSIS
The third inquiry is whether implying the equitable remedy of an accounting is consistent with the underlying purposes of the legislative scheme. The FDIC argues that the purpose of the Act is to enhance its power to preserve the solvency of its insurance fund. To that end, the Act requires every institution insured by the FDIC to submit an audited annual report to the FDIC. See 12 U.S.C. § 1831m. Thus, before the Bank went into receivership in 1990, it was required to submit annual reports, audited by independent public accountants, to the FDIC. This requirement advances the purpose of preserving solvency of the insurance fund by allowing for early detection of institutions in financial trouble.

A somewhat different purpose is advanced by requiring the FDIC to continue the annual reporting of the financial activities of a failed institution for which it has been appointed receiver. Not only is the FDIC required to maintain a “full accounting of each receivership,” it is also required to make an annual accounting or report of those matters to three specified entities, id. § 1821(d)(15)(A), (B), and to make that accounting or report available on request, id. § 1821(d)(15)(C). This requirement is consistent with at least one of the stated purposes of FIRREA, viz., “to improve the supervision of savings associations by strengthening capital, accounting, and other supervisory standards.” H.R. Conf. Rep. No. 101-222, at 393 (1989), reprinted in 1989 U.S.C.C.A.N. 432, 432. Strengthened accounting standards elevate sunlight over secrecy. :D :D :D :D

In analyzing this factor, the district court voiced its concern over the number of demands that might be made on the FDIC to provide the annual accounting. The FDIC is already required to prepare an annual accounting that conforms to the requirements it imposes on its member banks and to submit that accounting or report to the entities named in the statute. Upon the request of any shareholder-or any member of the public-the FDIC need only provide a copy of the report that it is already obliged to prepare. Enforcing this statute does not impose an additional duty on the FDIC, but rather ensures that the FDIC fulfills the obligations already imposed by Congress. Our holding therefore imposes no additional burden on the FDIC. :)

CONCLUSION:
We remand Bancorp I to the district court for a determination whether the six pages provided to Plaintiffs by the FDIC comply with the annual accounting and reporting practices and procedures required by the statute. If those six pages are sufficient, then Plaintiffs have received everything to which the statute entitles them. If they are not, the FDIC must perform the accounting required by the statute.

FOOTNOTES
1. The statement broke down the total amount of money received by the FDIC during the five-plus year period into only two categories: ?“Principal Collections and Interest Income on Assets, Net of Participation,” reported at nearly $83 million, and “Receipts from FDIC and Others,” reported at over $20 million. The disbursements received similar treatment, reported in only two aggregate amounts: ?“Liquidation and Other Disbursements” at nearly $84 million, and “Payments to FDIC” totalling over $18 million.
http://caselaw.findlaw.com/us-9th-circuit/1296303.html

--------------------------------------------------------------------