The FDIC has filed suit in U.S. District Court for the Central District of Illinois against former executives and directors of shuttered Corn Belt Bank and Trust Company seeking to recover losses that resulted from commercial loans made to three leasing companies.

According to court documents, the FDIC said it seeks to recover at least $10.4 million in losses suffered because the defendants acted recklessly in approving five high-risk commercial loans. Named as defendants were former president and chairman Jeffrey K. Stark, former senior vice president James L. Adkins, and two former members of the board of directors. The suit charges all four defendants with negligence under federal and state law for approving one or more of the loss loans.

The suit cites five high-risk loans totaling $3.7 million, $300,000 and $1.5 million made in 2005 to Horizon Leasing, a $5 million loan made in 2006 to Brentwood Truck Leasing and a $1.8 million balloon term loan made in 2007 to McKenzie Trucking and Leasing, to acquire all the debt and assets of Horizon and Brentwood.

Corn Belt Bank was closed February 13, 2009 by regulators, and the FDIC entered an agreement with Carlinville National Bank to take over the failed institution’s banking operations. The closure came six weeks after the FDIC and Illinois Department of Financial and Professional Regulation filed a cease and desist order against Corn Belt, claiming unsafe or unsound banking practices.

According to the court documents, by the time Corn Belt failed, loan concentrations equaled 307% of its Tier 1 capital and 60% of its loans scheduled as concentrations were adversely classified.