The FDIC-R states that a recoverable claim under FIRREA "must represent an amount due and owing at the time of the declaration of insolvency, although the specific amount of the claim may be established later." Citibank N.A. v. FDIC, 827 F.Supp. 789, 791 (D.D.C. 1993), modified on other grounds, 857 F.Supp. 976 (D.D.C. 1994). In F.D.I.C. v. Parkway Executive Office Center, Nos. CIV A 96-121, 96-122, 1998 WL 18204, *2 (E.D.Pa. Jan. 9, 1998), the Court stated that compensable damages under the statute are those damages which are "fixed, certain and vested" as of the date of appointment.
Thus, to be compensable under FIRREA, Ravenswood's damages must be: (1) fixed and determined as of the date of receivership; and (2) fall within the scope of allowable damages as limited under § 1821(e)(3)(B). 12 U.S.C. § 1821(e)(3); Citibank (S.D.), N.A. v. FDIC, 827 F. Supp. 789, 791 (D.D.C. 1993), modified in part on other grounds, 857 F. Supp. 976 (D.D.C. 1994); Nashville Lodging Co. v. Resolution Trust Corp., 59 F.3d 236, 244-47 (D.C. Cir. 1995).
Under FIRREA, a claimant has not suffered any "actual direct compensatory damages" unless its rights were fixed and unconditional at the time the receiver was appointed. See, e.g., Otte v. FDIC, No. 92-1194, slip op. at 4 (5th Cir. April 1, 1993); Citibank (South Dakota) v. FDIC, 827 F. Supp. 789, 791 (D.D.C. 1993); Local 2, 813 F. Supp. at 45. "A recoverable claim must represent an amount due and owing at the time of the declaration of insolvency. . . ."
Because we conclude that Management has no contractual entitlement to the Article 3 Fee and that damages stemming from the loss of the Article 3 Fee are not "actual direct compensatory damages," we need not address whether Management's claim for the Article 3 Fee was "determined" as of June 22, 1990, when the RTC was appointed receiver. See 12 U.S.C. § 1821(e)(3)(A)(ii)(I); Nashville Lodging Co. v. RTC, 839 F. Supp. 58, 62 (D.D.C. 1993); Citibank (South Dakota) v. FDIC, 827 F. Supp. 789, 791 (D.D.C. 1993); cf. Dababneh v. FDIC, 971 F.2d 428, 434-35 (10th Cir. 1992) (applying federal common law). Finally, we reject Management's claim that the district court failed to properly recognize its secured status with respect to the disputed funds.
Lost profits and diminution in asset value are distinct measures of damages. Schonfeld v. Hilliard , 218 F.3d 164, 176 (2d Cir. 2000) ("[C]ourts have universally recognized that [lost profits and lost asset damages] are separate and distinct categories of damages."); Citibank (S. Dakota), N.A. v. F.D.I.C. , 827 F. Supp. 789, 792–93 (D.D.C. 1993) (recognizing the distinction), opinion corrected on reconsideration in non-relevant part , 857 F. Supp. 976 (D.D.C. 1994). A lost profits measure seeks to recover the "lost operating profits" of a plaintiff's injured business.
If a contract has been repudiated in a timely fashion, then "a recoverable claim must represent an amount due and owing at the time of declaration of insolvency." Citibank (S. Dakota), N.A. v. F.D.I.C., 827 F. Supp. 789, 791 (D.D.C. 1993)(emphasis added). In Credit Life Ins. Co. v. F.D.I.C., the United States District Court for the District of New Hampshire held, "If FDIC-Receiver had authority to [repudiate] the letter of credit, no damages would be due as long as the triggering event . . . had not occurred prior to the date the bank was declared insolvent."
The Court must first consider whether the contractual right at issue vested prior to the appointment of the FDIC as Receiver.Id. at *2 (quoting Citibank, N.A. v. FDIC, 827 F.Supp. 789, 791 (D.D.C.1993), modified in part on other grounds, 857 F.Supp. 976 (D.D.C.1994)). The Court stated that in order to determine whether a right has vested on the date that a bank is declared insolvent, courts first "look to whether the insolvent bank's promise was binding and enforceable under contract law at that time."
Additionally, the Court's own research has not yielded a single authority that extends the FIRREA penalty clause proscriptions to instances involving "windfalls," "income streams" or other attenuated theories of what constitutes an impermissible claim for damages. See, e.g., Employees' Retirement System of Alabama v. RTC, 840 F. Supp. 972, 988-89 (S.D.N.Y. 1993) (RTC presented "unthinkable" argument when claiming that FIRREA barred "windfall" resulting from bondholders who sought market value of bonds upon repudiation); Citibank (South Dakota) v. FDIC, 827 F. Supp. 789, 791-93 (D.D.C. 1993), rev'd in part on other grounds, 857 F. Supp. 976 (D.D.C. 1994) (FIRREA did not bar claim for damages seeking value of a repudiated contract's non-compete clause despite FDIC's "attempt to equate [that clause] . . . with a penalty clause" and its emphasis on "the phrase `income stream'"). To the contrary, the few authorities that have addressed the penalty clause provision have found a damages claim barred only when it directly sought "late fees" or "future rent."
In the Court's view, the crucial question is whether Citibank had an unqualified right to expect performance of the non-compete provision on the date of receivership.Citibank, N.A. v. Federal Deposit Insurance Corporation, 827 F. Supp. 789, 791 (D.D.C. 1993). Moreover, as noted above, the court disagrees that Source One had a "claim" under FIRREA.