Tenth Circuit Upholds FDIC Ownership of Tax Refunds in Cases of Failed Banks — 2020-05-27

WASHINGTON — In a case remanded by the U.S. Supreme Court, the U.S. Court of Appeals for the Tenth Circuit yesterday issued a favorable decision holding tax refunds generated by a failed bank belonged to the FDIC as receiver rather than the bankruptcy trustee for the failed bank's parent company. The dispute arose from the 2011 failure of United Western Bank in Denver, Colorado. Shortly after the failure, the Bank's parent company, United Western Bancorp, Inc., filed for bankruptcy. Both the FDIC as receiver for the Bank and the parent company's bankruptcy trustee, Simon Rodriquez, claimed ownership of the $4.1 million tax refund. The bankruptcy trustee filed suit in bankruptcy court and prevailed. The FDIC as receiver appealed and, after the bankruptcy court's decision was overturned, the case eventually made its way to the U.S. Supreme Court.