By Becky Yerak |
The former chief executive of Inbank, an Oak Forest-based lender that
failed last September, has filed for Chapter 7 bankruptcy.

Cynthia Grazian of Chicago listed $2.2 million in assets and $4.3
million in liabilities, according to documents filed Jan. 22 in federal
bankruptcy court in the northern district of Illinois.

Inbank, which had $212 million in assets, was seized last September and sold to MB Financial in a government-assisted deal.

At the time of its failure, American Banker, a national trade publication, called the bank’s downfall “an extreme example of an aggressive regulatory approach to deteriorating credit quality.”

Regulators had deemed Inbank “well capitalized” as of March 31, 2009, the publication pointed out. But the bank restated its first-quarter results July 27, increasing the amount of money set aside for potential loan losses by 38-fold and wiping out its capital. “The obvious speculation is that examiners told the bank that its valuations were way off,” the publication said.

On Aug. 3, Inbank was hit with a cease and desist order by regulators demanding that it raise capital within 90 days. It also ordered that Grazian have no further role at the bank.

But Inbank didn’t get 90 days to raise capital on its own. On Sept. 4 it was seized by the government and most of its assets and deposits sold to MB Financial with financial assistance from the Federal Deposit Insurance Corp.

The institution had been established in 1970 as Interstate Bank of Oak Forest. In 2008 it shortened its name to Inbank.

Unsecured creditors in the bankruptcy filing include Bank of America, which is owed $2 million in Inbank-related debts, and the FDIC for unspecified possible claims “relating to closure of Interstate Bank (Inbank).”

The FDIC has estimated that the cost of Inbank’s failure to the deposit insurance fund will be $66 million.

Personal property claimed as exempt in the bankruptcy filing  includes a $2.1 million Lake Shore Drive condominium. She made $272,501 at Inbank in 2008.

Grazian’s bankruptcy lawyer is Bruce Wald of Tishler & Wald in Chicago. She couldn’t be reached for comment on the bankruptcy filing.