## Facts

- C & C Investment Properties, L.L.C. (C&C) bought foreclosed real estate financed by Heritage Banking Group through promissory notes secured by deeds of trust, with personal guaranties by Glen and Charlotte Collins.
- C&C alleged a side agreement with Heritage: C&C would repay only Heritage’s foreclosure purchase price for each property, and Heritage would later refinance based on increased, post-renovation value.
- C&C stopped making payments, asserting Heritage stopped honoring the side agreement; Heritage foreclosed.
- C&C and Glen Collins sued Heritage for breach of contract and fraudulent inducement.
- Heritage became insolvent; the FDIC was appointed receiver and transferred certain assets and liabilities, including C&C’s notes and guaranties, to Trustmark National Bank under a purchase-and-assumption transaction.
- C&C added Trustmark as a defendant; Trustmark asserted 12 U.S.C. § 1823(e) as a bar to claims and defenses relying on the alleged side agreement and counterclaimed to collect amounts due on the notes.
- C&C relied on testimony suggesting the side agreement may have been described in an email or other writing, but did not identify a writing satisfying statutory formalities.

## Issues

1. Whether Trustmark, as an acquiring bank that purchased assets from the FDIC’s receivership, could invoke 12 U.S.C. § 1823(e) to bar claims and defenses based on an alleged side agreement with the failed bank.
2. Whether Trustmark waived the § 1823(e) defense by the terms of its acquisition agreement or by delayed assertion in the litigation.
3. Whether the plaintiffs produced evidence sufficient to create a genuine dispute that the alleged side agreement met § 1823(e)’s requirements.

## Decision

- The Fifth Circuit affirmed summary judgment for Trustmark.
- Trustmark could assert § 1823(e) as a successor to the FDIC’s interest in the notes and guaranties.
- Trustmark did not waive § 1823(e) through the acquisition agreement or litigation conduct.
- Plaintiffs failed to present evidence of an agreement satisfying all four statutory elements of § 1823(e); thus, their claims and defenses based on the alleged side agreement were barred.

## Legal Principles

- Under 12 U.S.C. § 1823(e), an agreement that would diminish or defeat the FDIC’s interest in an acquired asset is unenforceable unless it: (1) is in writing; (2) was executed by the bank and the claimant contemporaneously with the bank’s acquisition of the asset; (3) was approved by the bank’s board or loan committee as reflected in minutes; and (4) was continuously an official bank record.
- The protections of § 1823(e) extend to private purchasers who acquire assets from the FDIC following a bank failure.
- Speculation or generalized testimony about possible emails or informal writings is insufficient to satisfy § 1823(e) absent proof of contemporaneous execution, formal approval, and continuous record retention.
- Waiver of § 1823(e) requires a clear, intentional relinquishment; routine acquisition terms and non-prejudicial timing in raising the defense ordinarily do not establish waiver.

## Conclusion

The Fifth Circuit held that borrower claims and defenses premised on a purported refinancing side agreement with a failed bank were barred by § 1823(e) because the borrowers lacked evidence of a qualifying written, executed, approved, and recorded agreement, and the acquiring bank could invoke the FDIC’s statutory protection without waiver.


C & C Inv. Props., L.L.C. v. Trustmark Nat'l Bank, 838 F.3d 655 (5th Cir. 2016)