These are stories from the staff of the FDIC about bank shutdowns that they had to do. A sample….
At the Penn Square Bank closing, FDIC closing personnel were assigned portfolios of large, complex, distressed oil and gas loans to evaluate for potential recovery. A certain wildcat drilling company, whose owners were notorious for both their wild and extravagant lifestyles and their lack of success in the oil patch, had an $18 million loan outstanding. The loan initially was valued at a complete $18 million loss. A few days later, a local newspaper ran a front-page article proclaiming in the headline that the drilling company had hit an “Elephant Well.” As it now appeared that the borrowers were rich and their debt would be paid in full, the valuation estimate was changed to reflect full recovery of the $18 million loan. Nearly a week passed before it was discovered that the company had drilled into the Oklahoma Gas & Electric underground storage facility. Both claimed that they had no idea.