When the First Piedmont Bank in Georgia failed, the Federal Deposit Insurance Corporation sued the officers and directors of the bank, alleging that nine loans made by the bank lacked due diligence and that this amounted to gross negligence and directly contributed to the failure of the bank.

Recently both parties have agreed to a stay in the discovery phase of the lawsuit so they may pursue mediation to resolve the issue without having to go to court.

While the FDIC maintains that the bank officers were warned of impending financial troubles, the plaintiffs have argued that they were certainly not alone in failing to foresee the “Great Recession” that hit the United States as part of the worldwide financial downturn.  The plaintiffs have further denied that they were warned by Federal Regulators, which was asserted by the FDIC as well.

The new filings postpone further discovery until January 31, 2014.  If no mediated solution has been achieved by that time, the lawsuit can commence.  No information concerning the mediator chosen or the venue where mediation will be held has been released.