The FDIC brought a lawsuit against Illinois Broadway Bank and former NFL player Jim McMahon is one of the seven former board members for the bank.
The FDIC is suing to recover $104 million from 17 bad loans that the bank made before it shut down in 2010.
We warn all clients about Board Member, Officer’s and Director’s liability issues as this has been an increasing source of third party exposure. This liability extends to both for-profit and non-profit enterprises and has become increasingly onerous and and a source of negative publicity, stress and a serious financial risk.
Before joining any board be sure and have written confirmation of the insurance policies they may have in place in place and their indemnity policy as it applies to your specific role. If they don’t have one, tread carefully and understand you are serving at your own risk and expense. Even if they do, assume it won’t be adequate against a liability of the kind pointed out ere and have your personal assets properly firewalled.
Professional athletes, entertainers and other public figures including business luminaries are often used as bait to lure people to business and charitable enterprises. Being in that position carries specific risks and liabilities. – Ike Devji
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