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GREELEY — Six officers of the failed New Frontier Bank in Greeley have been prohibited by the Federal Deposit Insurance Corp. from engaging in banking-related activities as a result of their involvement with NFB, which was closed and taken over by the FDIC in 2009.
Barred from further participation in banking activity were Larry Seastrom, New Frontier’s founder and president; bank directors Timothy Thissen, Jack P. Renfroe, Robert J. Brunner, John O. Kammeier; and banking officer Greg Bell.
The FDIC documents said each of the men entered into the consent agreements “without admitting or denying any violations, unsafe or unsound banking practices and/or any breaches of fiduciary duty?”
The FDIC documents said it had reason to believe that each respondent “engaged or participated in violations, unsafe or unsound banking practices, and/or breaches of fiduciary duty as an institution-affiliated party of New Frontier Bank.”
The documents also allege that, “by reason of such violations, practices and/or breaches of fiduciary duty, the bank has suffered or will probably suffer financial loss or other damage and/or respondent received financial gain or other benefit.”
The documents also allege that “such violations, practices and/or breaches of fiduciary duty involve personal dishonesty on the part of the respondent or demonstrate the respondent’s willful and/or continuing disregard for the safety or soundness of the bank.”
The list of activities the former NFB officers are prohibited from include “participating in any manner in the conduct of the affairs of any financial institution or organization” and having any voting rights in any financial institution.”
The order was dated Nov. 4, 2010. The FDIC took over the bank on April 10, 2009, the day after state banking regulators shut it down for a host of issues, including bad lending practices. Those bad lending practices were alleged to include pressuring Eaton-based Johnson Dairy — one of the state’s largest dairy operations — to borrow additional money that later led to its Chapter 11 bankruptcy declared in January 2009.
Johnson Dairy is poised to emerge from bankruptcy after more than a year and a half of reorganization of its debts.
Seastrom, Thissen, Brunner, Kammeier, Renfroe and Bell — along with bank directors Donald Lawler and Rodney Dean Juhl and bank officer Jim Rutz — were sued in civil court in December 2009 by about 60 NFB shareholders seeking $13 million in restitution, alleging the bank directors and officers engaged in practices that led to the bank’s failure.
The case was dismissed at the shareholders’ request in March 2010.