Jerry Von Rohr was employed as the president, chairman, and CEO of Reliance Bancshares Inc. In September 2001, Von Rohr and Reliance entered into an amended employment agreement which included that “[c]ommencing September 1, 2002, this Agreement shall continue for consecutive three (3) year periods unless either party terminates the same by giving written notice to the other not less than sixty (60) days before September 1, each year. If notice of termination is given as aforesaid, this Agreement shall continue for the balance of the term herein provided and then will terminate at the end thereof. . . .” 

In June 2011, a special meeting of Reliance’s board convened and voted not to renew Von Rohr’s employment agreement, reasoning that Von Rohr’s leadership was responsible for the bank’s troubled financial situation. The board believed that the employment agreement would end on August 31, 2011, so long as they gave him 60 days’ notice. Von Rohr asserted that his contract did not end for another year and that he was therefore entitled to compensation for one year’s salary and other benefits. Reliance contacted the FDIC to inquire whether the compensation that Von Rohr sought was a golden parachute payment. The FDIC stated that the payment qualified as a parachute payment. 

In February 2013, Von Rohr sued Reliance for breach of contract and sought a declaration that the compensation he asked for did not qualify as a golden parachute. In October 2013, the deputy regional director for the FDIC issued a determination that the payments that Von Rohr sought did constitute a golden parachute. On May 20, 2014, the court determined that Von Rohr had not met his burden of showing that the FDIC decision was capricious and upheld the FDIC’s decision. Von Rohr appealed. 

How did the appeals court rule? What reasons did the appeals court give for its ruling? According to the FDIC, under what conditions can a “troubled depository institution” make a golden parachute payment to an institution affiliated party?