## Facts

- The Resolution Trust Corporation (RTC), acting as conservator/receiver for Franklin Savings Association (FSA), sued former FSA directors, officers, and certain dividend recipients for losses tied to alleged mismanagement and dividend payments.
- RTC alleged FSA’s directors authorized and paid substantial dividends when FSA allegedly had negative net worth measured on a fair-market-value basis.
- RTC alleged applicable law and regulations required capital, net worth, and earnings to be determined on a fair-market-value basis before dividends could lawfully be paid.
- Defendants moved to dismiss under Rule 12(b)(6) and, alternatively, sought summary judgment under Rule 56, raising statute-of-limitations and multiple merits defenses.

## Issues

1. Whether RTC’s claims were barred because state statutes of limitations allegedly expired before RTC’s appointment, or whether FIRREA’s extender statute supplied a federal limitations period.
2. Whether the complaint plausibly stated claims based on allegedly unlawful dividends paid while FSA had negative fair-market-value net worth.
3. Whether the business judgment rule warranted dismissal at the pleading stage.
4. Whether doctrines such as *D’Oench, Duhme* and 12 U.S.C. § 1823(e) could be used to bar RTC’s tort and statutory claims against former insiders.

## Decision

- The court granted the motions in part and denied them in part.
- All claims against defendant Pfost were dismissed without prejudice.
- Counts X–XV were dismissed without prejudice as to all defendants.
- Motions to dismiss were denied as to Counts I–III for all defendants except Pfost.
- Motions to dismiss were denied as to Counts IV–IX for all defendants.
- The court held that FIRREA’s extender statute prevented dismissal based solely on alleged pre-appointment expiration of state limitation periods.
- The court declined to dismiss dividend-related and mismanagement counts where RTC alleged dividends were paid despite negative fair-market-value net worth.
- The court declined to apply the business judgment rule and *D’Oench*/§ 1823(e) as categorical pleading-stage bars to RTC’s core claims.

## Legal Principles

- On a Rule 12(b)(6) motion, the court accepts well-pleaded factual allegations as true and draws reasonable inferences in favor of the plaintiff; the question is plausibility of entitlement to relief, not ultimate proof.
- FIRREA’s extender statute provides RTC a federal limitations period for covered claims, and defendants generally cannot defeat RTC suits merely by asserting that state limitation periods had run before RTC’s appointment.
- Allegations that directors caused a regulated financial institution to pay dividends when fair-market-value accounting would show insufficient surplus or negative net worth can state claims for unlawful dividends and related fiduciary-duty and negligence theories.
- The business judgment rule typically turns on fact questions (good faith, informed decision-making, compliance with legal constraints) and is not ordinarily resolved on the face of the complaint where regulatory violations and insolvency-related allegations are pleaded.
- *D’Oench, Duhme* and 12 U.S.C. § 1823(e) are aimed at preventing undocumented side agreements from defeating federal banking agencies’ interests in acquired assets and do not generally bar RTC’s affirmative claims against former directors and officers for misconduct.

## Conclusion

The court allowed RTC’s principal mismanagement and dividend-related claims (Counts I–IX, with limited exceptions) to proceed, holding that FIRREA’s extender statute and the pleading-stage standards prevented dismissal based on asserted time bars and that neither the business judgment rule nor *D’Oench*/§ 1823(e) blocked RTC’s core theories at this stage, while dismissing one defendant and several counts without prejudice.


Resolution Trust Corp. v. Fleischer, 826 F. Supp. 1273 (D. Kan. 1993)