Bank of Manhattan, N.A. v. Federal Deposit Insurance

Opinion by Judge O’SCANNLAIN; Dissent by Judge RAWLINSON.

OPINION

O’SCANNLAIN, Circuit Judge:

We must decide whether the Federal Deposit Insurance Corporation, in its role *1134of receiver of a closed bank, may breach underlying asset contractual obligations without consequence.

I

A

In December 2007, Professional Business Bank (“PBB”) sold to First Heritage Bank, N.A. (“Heritage”) a fifty percent participation interest in a commercial loan PBB had made to Al’s Garden Art, Inc. The terms of the PBB-Heritage Participation Agreement (“Agreement”) imposed two contractual limitations on Heritage’s interest…