Federal Deposit Insurance v. AmTrust Financial Corp. (In Re AmTrust Financial Corp.)

OPINION

PAUL L. MALONEY, Chief District Judge.

When AmTrust Financial Corporation (“AFC”) filed for bankruptcy in late 2009, the FDIC was appointed receiver for AFC’s subsidiary, AmTrust Bank (“the Bank”). In that capacity, the FDIC sought payment from AFC under 11 U.S.C. § 365(o), which requires that a party seeking Chapter-11 bankruptcy fulfill “any commitment ... to maintain the capital of an insured depository institution.” The FDIC argued that AFC made such a commitment by agreeing to entry of a cease-and-desist order requiring AFC’s board to “ensure that [the Bank] complies” with the…