Rapaport v. United States Department Of The Treasury, Office Of Thrift Supervision

59 F.3d 212 (1995)


The Federal Home Loan Bank Board--the governing body of the FSLIC--promulgated a regulation requiring that any individual who owned 25% or more of the stock of a newly insured savings association 'personally guarantee the maintenance of the association's net worth at the regulatorily required level.' D approved Great Life's application upon the condition that P, who planned to purchase 74% of the Great Life's shares, enter into a Net Worth Maintenance Agreement with the FSLIC. P entered into a five-year Agreement to maintain the Association's net worth in compliance with the Net Worth Requirement applicable to the Association, computed in accordance with 12 C.F.R. § 563.13, or any successor regulation then in effect. Great Life began to experience capital deficiencies. D notified P that Great Life's capital was deficient. P refused to contribute additional capital. P eventually determined that Great Life's capital deficiency amounted to some $3.5 million as of December 31, 1989. In June 1990, the Resolution Trust Corporation was appointed receiver of Great Life, which has since been liquidated. D began an administrative proceeding against P. An Administrative Law Judge found that: (1) P's role in the activities of Great Life 'was limited solely to that of a stockholder'; (2) P was 'unjustly enriched because he received the benefit of Great Life's having deposit insurance while retaining the capital he was supposed to contribute under the Agreement; and (3) under the Agreement P was obliged to contribute $1,946,000 to help cover Great Life's capital deficiency. D's Acting Director reduced P's liability to $ 1,536,675 based upon a revised valuation of one of Great Life's loans and held P liable under unjust enrichment. P appealed.