Aaron's Founder R. Charles Loudermilk Sued by Federal Regulators
Loudermilk and eight other officials and directors of Buckhead Community Bank were sued by FDIC for approving nearly $22 million in bad real estate loans.
The Federal Deposit Insurance Corp. sued R. Charles Loudermilk, founder of Aaron's furniture rental company, because of $21.8 million of bad real estate loans made by the failed Buckhead Community Bank, according to Businessweek.
Loudermilk, known by many as Mr. Buckhead, helped found Buckhead Community Bank in 1998 and was its former chairman. In September, Loudermilk left Aaron's as its board chairman, becoming chairman emeritus.
According to a complaint from FDIC filed on Nov. 30 in federal court in Atlanta, Loudermilk and eight of the bank's insiders "knowingly and recklessly" approved the 13 bad loans which violated the bank's underwriting policies, according to news reports.
FDIC also sued former bank CEO Martin Cosgray; former bank officers Louis J. Douglass III, Gregory W. Holden and Darryl Overall; and directors Hugh Aldredge, David Allman, John Margeson and Larry Martindale.
Robert Long of Alston & Bird LLP, the attorney for Loudermilk and the other defendants in the lawsuit, told news outlets Monday that the complaint and allegations lack merit.
The bank also operated branches as Cobb Community Bank, Sandy Springs Community Bank and Alpharetta Community Bank, according to the Atlanta Journal-Constitution.
The bank ultimately failed on Dec. 4, 2009 and neglected to adhere to "the fundamental tenets of banking" in management of its loan portfolio, according to the FDIC. The failure resulted in a loss of $241.4 million to the insurance fund that is supposed to protect investors, AJC reports.
The AJC reports that the FDIC has now sued officials and directors at 11 failed Georgia banks, more than any other state.
Last year, Loudermilk was honored with the Four Pillar Award by the Council for Quality Growth. The award is bestowed upon individuals who embody the four pillars of leadership and success: quality, responsibility, vision and integrity.