Ravenswood Bank Officials Sued for Alleged Risky Loans

Three years after regulators closed Ravenswood Bank, former bank officials are being sued for allegedly making risky real estate loans. 

The Federal Deposit Insurance Corporation is suing eight bank insiders for $9.1 million, the Chicago Tribune reports. 

The Lawrence Avenue bank closed Aug. 6, 2010 after failing to find a buyer or raise additional capital as demanded by the FDIC.

Friday, the agency filed a complaint that accused the former chief executive, senior lending officer and several board members of approving eight loans between 2005 and 2008 that went bad. 

One of those deals resulted in an alleged 92 percent loss on $6 million in principal while another claimed $3.5 million in damages on a condominium project.

The complaint said the group was grossly negligent and breached fiduciary duty, the Tribune reported. 

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Closing the bank cost the FDIC about $68.1 million, according to the nonprofit institution, Bailout Sleuth. 

In June 2010, Ravenswood Bank had about $264.6 million in assets and $269.5 million in total deposits. The FDIC arranged for the Northbrook Bank and Trust Co. to absorb those funds. 

The closure marked the 109th FDIC-insured institution to fail the nation in 2010 and the 13th in Illinois according to the financial publication Calculated Risk.