Full opinion text
BOWNES, Senior Circuit Judge. This is a case involving a failed loan transaction that well illustrates Polonius’ advice, “[njeither a borrower, nor a lender be.” These appeals require us to determine, inter alia, the applicability of certain federal defenses available to the Federal Deposit Insurance Corporation (FDIC) in its capacity as receiver when it seeks to enforce against a bankrupt borrower an obligation formerly held by a failed financial institution. PROCEDURAL PATH This case arises from the default by the 604 Columbus Avenue Realty Trust (“the Trust”) on payment of a loan from the Capitol Bank and Trust Company (“the Bank”). Following the Trust’s default, the Bank commenced mortgage foreclosure proceedings on the properties securing its loan, among which were the property owned by the Trust itself and properties of the Trust’s principal beneficiary, Millicent C. Young (“Young”). To forestall the foreclosures by the Bank, both the Trust and Young filed for protection under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Massachusetts. In May 1988, the Trust, with Young as co-plaintiff, initiated an adversary proceeding against the Bank, its principal secured creditor. In September 1990, the bankruptcy court awarded the plaintiffs approximately $140,000 in damages on claims of fraud and deceit, conversion, and breach of contract, plus interest and attorney’s fees. The bankruptcy court found that the Bank improperly applied loan proceeds to payment of “soft costs” incurred by the Trust — financing fees, interest, taxes and similar expenses. It also found that an officer of the Bank extracted kickback payments from the loan proceeds in return for his assistance in securing approval of the loan. Under its power of equitable subordination pursuant to 11 U.S.C. § 510(c), the bankruptcy court subordinated the Bank’s secured claim on the Trust’s bankruptcy estate to the claims of the Trust’s other creditors by an amount equal to the damages, plus interest and attorney’s fees. It ordered the transfer from the Bank to the Trust of a security interest in the Trust’s estate equivalent to the total of the damages, interest and attorney’s fees. During the pendency of an appeal of this judgment to the district court, the Bank was declared unsound by Massachusetts banking officials. The FDIC was appointed receiver, and in February 1991 was substituted as defendant-appellant in the district court. In August 1991, the district court affirmed in substantial part the bankruptcy court’s rulings on the merits of the Trust’s claims and equitable subordination of part of the Bank’s secured claim. It ruled, however, that the FDIC was entitled to raise the defenses available to it under the doctrine of estoppel established in D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942), and 12 U.S.C. § 1823(e). Invoking the D’Oench doctrine, the district court vacated that part of the bankruptcy court’s judgment that was premised on the secret agreement by one of the Trust’s principals to provide kickbacks to a Bank officer. Both the Trust and the FDIC appeal various aspects of the judgments of both the bankruptcy and district courts. We affirm the judgment of the bankruptcy court, as modified by the district court. BACKGROUND AND FACTS Before stating the facts, we think it useful to review the dual role of the FDIC in bank failures. Our recent decision in Timberland Design, Inc. v. First Service Bank For Savings, 932 F.2d 46, 48 (1st Cir.1991), provides an excellent summary of the FDIC’s different functions: As receiver, the FDIC manages the assets of the failed bank on behalf of the bank’s creditors and shareholders. In its corporate capacity, the FDIC is responsible for insuring the failed bank’s deposits. Although there are many options available to the FDIC when a bank fails, these options generally fall within two categories of approaches, either liquidation or purchase and assumption. The liquidation option is the easiest method, but carries with it two major disadvantages. First, the closing of the bank weakens confidence in the banking system. Second, there is often substantial delay in returning funds to depositors. The preferred option when a bank fails, therefore, is the purchase and assumption option. Under this arrangement, the FDIC, in its capacity as receiver, sells the bank’s healthy assets to the purchasing bank in exchange for the purchasing bank’s promise to pay the failed bank’s depositors. In addition, as receiver, the FDIC sells the “bad” assets to itself acting in its corporate capacity. With the money it receives, the FDIC-receiver then pays the purchasing bank enough money to make up the difference between what it must pay out to the failed bank’s depositors, and what the purchasing bank was willing to pay for the good assets that it purchased. The FDIC acting in its corporate capacity then tries to collect on the bad assets to minimize the loss to the insurance fund. Generally, the purchase and assumption must be executed in great haste, often overnight. Id. at 48 (citations omitted). Turning to the case at hand, we first summarize the extensive findings of fact of the bankruptcy court. See In re 604 Columbus Avenue Realty Trust, 119 B.R. 350 (Bankr.D.Mass.1990) (“Bankruptcy Court Opinion”). The loan transaction at issue in these appeals originated in the efforts of Young and several business associates to purchase two buildings located at 604-610 Columbus Avenue in Boston, Massachusetts (“the Columbus Avenue properties”), and a restaurant operated on the premises known as “Bob the Chef.” Young was the owner of a contracting and construction company. Among her business partners was Carl Benjamin (“Benjamin”), who served as her financial adviser. In October 1985, Young and Benjamin learned of the availability for purchase of the Columbus Avenue properties. Young and Benjamin, along with two other partners, agreed to enter into a business relationship through which they would purchase the Columbus Avenue properties, renovate and resell the properties as condominiums, resell the restaurant, and share the profits from the condominium sales and sale of the restaurant. In November 1985, Young and Benjamin offered the owner of the Columbus Avenue properties $1.2 million for the buildings and the restaurant. Young’s attorney, Steven Kunian (“Kuni-an”), suggested that she and her partners seek financing for the purchase and renovation of the Columbus Avenue properties from the Bank. Kunian had represented the Bank from time to time on loan transactions. In December 1985, Benjamin negotiated the terms of a loan from the Bank on behalf of Young and the other partners. The Bank was represented in these negotiations by a loan officer, Arthur Gauthier, and a member of the Bank’s Board of Directors, Sidney Weiner (“Weiner”). Weiner also served on the Bank’s Executive Committee, which was responsible for the approval of loans. Although not a salaried employee of the Bank, Weiner was paid director’s and consultant’s fees, and was regarded by Gauthier and other bank employees as having primary authority for negotiation of the loan to Young and her partners. Loans larger than $25,000 required the approval of the Bank’s Executive Committee. Gauthier presented the proposal for the loan for the Columbus Avenue properties three times before the Executive Committee approved it on January 15, 1986. Final approval by the Executive Committee was achieved when Young agreed to pledge her residence as additional collateral for the loan. Weiner was one of the Executive Committee members who voted to approve the loan. Some time before the Executive Committee voted to approve the loan, Weiner told Benjamin that the loan would only be approved on the condition that Benjamin agree to pay Weiner personally for his assistance in securing the Bank’s approval of the loan. In exchange for this kickback, Weiner helped the loan proposal reach the Executive Committee, voted to approve the loan, and influenced other Committee members to vote in favor of the loan. There was no evidence that other members of the Executive Committee were aware of Weiner’s kickback arrangement with Benjamin when they voted to approve the loan. The bankruptcy court found that $26,300 was paid to Weiner. Attorney Kunian represented both the Bank and the borrowers at the closing on the loan on February 27, 1986. Kunian suggested that Young and her associates hold the Columbus Avenue properties through a realty trust. At the closing the 604 Columbus Avenue Realty Trust was created, with Young as its trustee. Young was given 62.5% of the beneficial interest in the trust, while each of her three partners, including Benjamin, was made a 12.5% beneficiary. To secure the loan from the Bank, Young executed on behalf of the Trust a “Commercial Real Estate Promissory Note,” a “Loan and Security Agreement” (“L & SA”), an “Addendum to Loan' & Security Agreement (“L & SA Addendum”), and a “Construction Loan Agreement” (referred to collectively as the “First Loan Agreement”). The Bank, in turn, agreed to lend the Trust $1,500,000. The Bank used a standard-form L & SA, which contained the following provisions: SECTION 6. BANK’S RIGHT TO SET-OFF 6.01 The Borrower agrees that any deposits or other sums at any time credited by or due from the Bank to the Borrower, or any obligor or guarantor of any liabilities of the Borrower in possession of the Bank, may at all times be held and treated as collateral for any liabilities of the Borrower or any such obligor or guarantor to the Bank. The Bank may apply or set-off such deposits or other sums against said liabilities at any time. SECTION 8. EXPENSES 8.01 The Borrower shall pay or reimburse the Bank on demand for all out-of-pocket expenses of every nature which the Bank may incur in connection with this Agreement and the preparation thereof, the making of any loan provided for therein, or the collection of the Borrower’s indebtedness under this Agreement. ... [T]he Bank, if it chooses, may debit such expenses to the Borrower’s Loan Account or charge any of the Borrower’s funds on deposit with the Bank. The parties also executed an Addendum to this L & SA, which established the following schedule for the Bank’s advancement of the proceeds of the loan to the Trust: $1,200,000 at the closing to pay for the Trust’s acquisition of the Columbus Avenue properties and the restaurant; a further $200,000 for construction-related expenditures at the Columbus Avenue properties, but only upon itemized requisitions approved by the Trust, its architect, and the bank; and $100,000 for the “soft costs” incurred with respect to the loan. “Soft costs” covered the various non-construction costs of the renovation effort, and included closing fees, interest, taxes and insurance. To secure its promissory note, the Trust gave the Bank, inter alia, a mortgage on the Columbus Avenue properties and a conditional assignment of rents from the properties in favor of the bank. Young, in her individual capacity, also gave the Bank mortgages on her residence and two other properties owned or held on her behalf. At the closing, the Bank disbursed approximately $1,250,000, of which nearly $1,200,000 was paid to the owners of the Columbus Avenue properties, and the remaining amount was paid to the Bank itself for the costs of the loan. The Bank also created a checking account through which it was to disburse the remaining amounts of the loan. A signature card was created for the account bearing the names of Young, Benjamin, and another partner of the Trust. Those listed on the signature card had access to loan proceeds upon their disbursement by the Bank. Young was apparently not aware that Benjamin’s signature was on the card. The bankruptcy court found that the Trust’s ability to repay the loan on the Columbus Avenue properties hinged on several assumptions that Young and her partners understood or reasonably should have understood at the closing. One of these assumptions was that $100,000 for soft costs anticipated in First Loan Agreement would not cover those costs completely and would have to be supplemented by funds of Young and her partners. Another assumption was that the Trust could generate the funds necessary to complete the condominium project by selling the restaurant. The Bank advanced the remainder of the proceeds of the loan — approximately $250,-000 — within forty-seven days of the closing, in three large payment. Weiner personally directed Gauthier to pay these advances into the Trust’s account, but did so without the approval of Young and in violation of the procedures specified in the First Loan agreement. The bankruptcy court found that the Bank paid itself a total of $102,305.54 out of loan proceeds to cover soft costs, thereby exceeding by $2,305.54 the amount of soft costs contemplated in the First Loan Agreement. The sum of $26,300 was withdrawn by Benjamin from the loan account without Young’s knowledge or authorization, which was then used to make kickback payments to Weiner. Sometime thereafter, Young learned of Benjamin’s conduct, and attempted unsuccessfully to expel him from the Trust and to get him to give up his beneficial interest in it. When the six-month term of the First Loan Agreement expired in August 1986, the Trust could not repay the loan. It therefore negotiated a second six-month loan to refinance the first (the “Second Loan Agreement”). On September 12, 1986, the Trust signed a promissory note to the Bank for $1,750,000, which was secured by the same mortgages and guarantees as the First Loan Agreement. Young, on behalf of the Trust, executed a new L & SA that contained provisions identical to those in the L & SA accompanying the previous loan. In addition, the Addendum to the L & SA in the Second Loan Agreement provided, inter alia, the following scheme for disbursement: The Bank shall advance the loan proceeds approximately as follows: a. $1,500,000.00 at closing for acquisition of real estate and personal property[;] b. $190,000.00 for construction costs ... [;] c. $60,000.00 for soft costs incurred with respect to the loan. At the closing of the Second Loan Agreement, $1,580,151.11 in loan proceeds were disbursed to pay the $1,524,516.11 balance remaining on the First Loan agreement and $55,635 in origination and attorney’s fees for the new loan. Four months later, in January 1987, the Trust sold the property at 610 Columbus Avenue for $692,400 and paid the Bank this amount in order to reduce the outstanding principal balance of the Second Loan Agreement. In March 1987, however, when • the Second Loan Agreement came due, the Trust was unable to repay it. The Bank therefore entered into an “Agreement to Extend Mortgage and Note” with the Trust, in exchange for an extension fee. The bankruptcy court found that during the term of the Second Loan Agreement and its extension, the Bank withdrew from the loan proceeds $169,406.12 for various soft costs, including closing fees, interest, charges for the loan extension, taxes, and attorney’s fees. This amount exceeded the “approximately” $60,000 in soft costs originally provided for in the second L & SA Addendum by $109,406.12. The Second Loan Agreement, as extended, came due on June 10, 1987. The Trust was unable to make payment. In September 1987, the Bank began foreclosure of the various mortgages it held as security for the loan. The bankruptcy court found that the reasons for the Trust’s default included, inter alia: the inability of the Trust to sell the restaurant, and the attendant loss of cash needed to finance the condominium renovations originally planned; the further deprivation of cash needed for the project as a result of the kickback payments; and the Bank’s overapplication of $109,406.12 in proceeds from the second loan to payment of soft costs. The bankruptcy court also concluded that it was the Trust’s failure to sell the restaurant, rather than the Bank’s overapplication of loan proceeds for soft costs and the kickback payments, that was by far the single most important reason for the failure of the project. DECISIONS OF THE BANKRUPTCY AND DISTRICT COURTS In bankruptcy court, the Trust and Young alleged that the Bank entered into and administered the loans for the improper purpose of extracting a kickback from loan proceeds. They also alleged that the Bank improperly applied proceeds from the two loans to the payment of soft costs. The plaintiffs alleged fraud and deceit, conversion, and breach of contract by the Bank. They also argued that the Bank’s inequitable conduct warranted the subordination of the Bank’s secured claim in the Trust’s bankruptcy estate to those of all of the Trust’s other creditors. In addition, the Trust and Young requested an order invalidating entirely the Bank’s mortgages on their properties. The bankruptcy court conducted a seven-day trial. It awarded the Trust $138,011.66 in damages. Of this amount, $26,300 was assessed as damages for the kickback payments made to Weiner by Benjamin. The kickback damages were based on claims of conversion, breach of contract and fraud under Massachusetts law. The remaining $111,711.66 in damages represented the total amount of soft costs that the bankruptcy court found to have been improperly removed from the loan proceeds by the Bank in violation of the limits set by the two loan agreements — i.e., $2,305.54 on the First Loan Agreement and $109,406.12 on the Second Loan Agreement. This award was premised on claims of conversion and breach of contract. The bankruptcy court also ordered that the $138,011.66 damages award be supplemented by an award of reasonable attorney’s fees, which it found were warranted as an element of the conversion damages under Massachusetts law, and also of post-judgment interest at the contract rate specified in the loan agreements. Invoking its powers of equitable subordination pursuant to 11 U.S.C. § 510(c), the court entered an order subordinating the Bank’s secured claim to the claims of priority and general unsecured claimants in an amount equal to the full amount of the damages, interest and attorney’s fees. It further directed that the Bank transfer to the Trust’s estate a portion of its security interest in an amount equal to the total damages. The bankruptcy court refused, however, to issue an order entirely invalidating the mortgages held by the Bank. While the Bank’s appeal of the bankruptcy court’s judgment was pending, the FDIC was appointed receiver and liquidating agent of the Bank, and substituted for the Bank as defendant-appellant. The FDIC continued the Bank’s appeal of the bankruptcy court’s judgment as to the conversion, breach of contract, and fraud claims, as well as its challenge to the bankruptcy court’s equitable subordination of its secured interest in an amount equal to the total damages. In addition, the FDIC raised two special federal defenses as to each aspect of the damages claims. The FDIC argued that the D’Oench doctrine— or its statutory counterpart, 12 U.S.C. § 1823(e)-precluded the bankruptcy court’s award of damages on the kickback arrangement, insofar as this claim was based on a secret agreement between Weiner and Benjamin. The FDIC also argued that the special holder in due course status accorded it under federal common law entirely barred the Trust’s claims for damages and equitable subordination against it in its receivership capacity. The Trust and Young, on the other hand, challenged the applicability of the federal defenses urged by the FDIC, as well as the FDIC’s right to raise these defenses for the first time on appeal. They also contested the bankruptcy court’s refusal to grant them an order invalidating entirely the Bank’s mortgages on their properties. In August 1991, the district court affirmed the bankruptcy court’s- rulings on the merits of the plaintiffs’ conversion and breach of contract claims with respect to the Bank’s improper application of loan proceeds for payment of soft costs. Although the district court found that the FDIC was entitled to raise its federal defenses for the first time on appeal, it rejected the FDIC’s argument that the federal common law holder in due course doctrine barred the Trust’s claims against it in its capacity as the Bank’s receiver. The district court also affirmed the equitable subordination of the FDIC’s secured claim on the Trust’s estate in an amount equal to the damages on the soft costs claims, i.e., $111,711.66, plus post-judgment interest. It reversed, however, the bankruptcy court’s inclusion of attorney’s fees as part of the overall amount of the FDIC’s claim subject to equitable subordination. The district court vacated the bankruptcy court’s award of $26,300 of damages based on the kickback arrangement between Benjamin and Weiner. Finding that the FDIC was entitled to raise the D’Oench doctrine for the first time on appeal, the court held that the kickback arrangement was a secret agreement squarely within the coverage of the doctrine. It therefore reduced the equitable subordination against the FDIC by an amount equal to the kickback damages. Because it found that the fraud claims based on the kickback arrangement could not stand against the FDIC, the court rejected the Trust and Young’s arguments that it declare the loan agreements — and the mortgages on the plaintiffs’ properties — void as illegal contracts in contravention of public policy. THE ISSUES ON APPEAL AND STANDARD OF REVIEW In their appeals to this court, both the FDIC and the Trust press substantially the same arguments made in their appeals of the bankruptcy court’s judgment to the district court. The FDIC argues that because it was the receiver of an insolvent bank, federal common law barred the plaintiffs’ claims of conversion, breach of contract, and fraud, as well as the equitable subordination of the FDIC’s secured interest in the Trust’s estate. The FDIC maintains that any damages against it in its receivership capacity based on the soft costs claims were barred by the federal common law holder in due course doctrine, and that the equitable subordination against it in an amount equal to those damages is contrary to federal common law. The FDIC also attacks the rulings of the bankruptcy court, affirmed by the district court, that the Bank misappropriated soft costs monies, as well as the equitable subordination of its secured claim to reflect the damages caused by the Bank’s misappropriation. It further challenges the district court’s affirmance of an award of post-judgment interest on the $111,711.66 in damages on the soft costs claims. The Trust, on the other hand, argues that the district court erred by applying the D’Oench doctrine for the first time on appeal. The Trust insists that the D’Oench doctrine does not bar its recovery on its claims relating to the kickback scheme. The Trust also maintains that the district court erred when it held that the bankruptcy court incorrectly included attorney’s fees as part of the overall amount of the FDIC’s security interest subject to equitable subordination in favor of the Trust and other creditors. In an appeal from a district court’s review of a bankruptcy court’s decision, we “independently review[ ] the bankruptcy court’s decision, applying the clearly erroneous standard to findings of fact and de novo review to conclusions of law.” In re G.S.F Corp., 938 F.2d 1467, 1474 (1st Cir.1991). See also In re Navigation Technology Corp., 880 F.2d 1491, 1493 (1st Cir.1989) (bankruptcy court’s determinations of law subject to de novo review); Briden v. Foley, 776 F.2d 379, 381 (1st Cir.1985) (clearly erroneous standard of review applied to bankruptcy court’s factual findings). DISCUSSION I. DISTRICT COURT REVIEW OF THE FDIC’S FEDERAL DEFENSES FOR THE FIRST TIME ON APPEAL Before considering the Trust’s state law claims underlying its damages award against the Bank, we first address the FDIC’s arguments that two special defenses established under federal law — the federal common law holder in due course and D’Oench doctrines — barred all of the plaintiffs’ claims and resulting' equitable subordination against it as the Bank’s receiver. In order to address the merits of these federal defenses, we must, as a threshold matter, determine whether the FDIC was entitled to raise them for the first time in the district court in its appeal of the bankruptcy court’s judgment. The district court based its decision to permit the FDIC to assert its federal defenses exclusively on the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), Pub.L. No. 101-73, 103 Stat. 183 (1989) (codified at 12 U.S.C. §§ 1811-1833e), which provides in pertinent part: (13) Additional rights and duties (A) Prior final adjudication The Corporation shall abide by any final unappealable judgment of any court of competent jurisdiction which was rendered before the appointment of the Corporation as conservator or receiver. (B) Rights and Remedies of conservator or receiver In the event of any appealable judgment, the Corporation as conservator or receiver shall— (i) have all the rights and remedies available to the insured depository institution (before the appointment of such conservator or receiver) and the Corporation in its corporate capacity, including removal to Federal court and all appellate rights; and (ii) not be required to post any bond in order to pursue such remedies. 12 U.S.C.A. § 1821(d)(13)(A)-(B). The district court found that the bankruptcy court’s judgment in favor of the Trust was “appealable” within the meaning of § 1821(d)(13)(B). It reasoned that the federal defenses against the Trust’s claim asserted by the FDIC in its receivership capacity were among “the rights and remedies available to ... the [FDIC] in its corporate capacity.” The district court concluded that the “rights and remedies” granted the FDIC in its receivership capacity included the right to raise its federal defenses for the first time on appeal. The district court based this analysis on its reading of FIRREA’s text and legislative history. The district court acknowledged that this interpretation of § 1821(d)(13)(B) conflicted with that of the Fifth and Eleventh Circuits, both of which have rejected this interpretation of FIRREA. In Olney Savings & Loan Association v. Trinity Banc Savings Association, 885 F.2d 266 (5th Cir.1989), the Fifth Circuit ruled that § 1821(d)(13)(B) did not in any way modify the substantive rights of the FSLIC in its receivership capacity, but merely assured the FSLIC standing to pursue all appeals previously available to it only in its corporate capacity. Accordingly, it held that FIRREA did not entitle the FSLIC to raise the D’Oench doctrine for the first time on appeal. Id. at 275. In Baumann v. Savers Federal Savings & Loan Assoc., 934 F.2d 1506 (11th Cir.1991), cert. denied, - U.S. -, 112 S.Ct. 1936, 118 L.Ed.2d 543 (1992), the Eleventh Circuit followed Olney, and rejected the argument of the Resolution Trust Corporation (“RTC”) that § 1821(d)(13)(B) entitled it to raise the D’Oench doctrine. Id. at 1511. In Baumann, the Eleventh Circuit expressly rejected the interpretation of § 1821(d)(13)(B) advanced by the district court in this case. The Baumann court concluded that to read the statute otherwise would be to grant a federal receiver new substantive rights, because neither FIRREA nor previously existing statutes granted the RTC in its corporate capacity the power to raise arguments for the first time on appeal. Id. We think that the Olney and Baumann courts’ interpretation of § 1821(d)(13)(B) is the proper one, and hold that the district court erred when it read FIRREA as allowing the FDIC in its receivership capacity to raise its federal defenses for the first time on appeal. We agree with the distinction drawn by Baumann: “the right at issue in this case is not the right of the [federal receiver] to argue [a federal defense], which is unquestioned, but rather the right of the [federal receiver] to raise an argument for the first time on appeal.” Id. at 1512. Section 1821(d)(13)(B) merely accords the FDIC in its receivership capacity standing to raise the same defenses available to the FDIC in its corporate capacity. It does not establish that the FDIC as receiver is entitled to raise its federal defenses for the first time on appeal. Although FIRREA does not grant the FDIC as receiver the right to raise its special federal defenses to the Trust’s claims for the first time on appeal, we must also consider whether there is any alternative basis on which the district court could have permitted the FDIC to raise its federal defenses. The FDIC argues that even if § 1821(d)(13)(B) does not grant it the right to raise its federal defenses, the district court nonetheless had the discretion, in its capacity as an appellate court, to address these defenses for the first time on appeal. The FDIC relies principally on Baumann for this argument. There, the Eleventh Circuit held that its discretion as an appellate court permitted it to address the federal receiver’s D’Oench doctrine argument for the first time on appeal. Id. at 1513. The court stressed the fact that the RTC had not had the opportunity to present its argument in the trial court because it had not become a party to the suit until after the entry of final judgment. Id. In order to prevent the RTC from being “penalized for not raising a defense it had no opportunity to present,” the Baumann court concluded that it would be appropriate to exercise its discretion to exempt the RTC in its receivership capacity from its general rule precluding argument of issues for the first time of appeal. Id. The Fifth Circuit has also adopted Baumann’s, approach in similar circumstances in which the federal conservator or receiver becomes a party to an appeal after the final judgment of the trial court. See Resolution Trust Corp. v. McCrory, 951 F.2d 68, 71 (5th Cir.1992) (citing Baumann and Union Fed. Bank v. Minyard, 919 F.2d 335, 336 (5th Cir.1990)). It is the general rule in this circuit that arguments not raised in the trial court cannot be raised for the first time on appeal. See, e.g., Boston Celtics Ltd. Partnership v. Shaw, 908 F.2d 1041, 1045 (1st Cir.1990); Brown v. Trustees of Boston Univ., 891 F.2d 337, 359 (1st Cir.1989), cert. denied, 496 U.S. 937, 110 S.Ct. 3217, 110 L.Ed.2d 664 (1990). Like other circuit courts of appeals, however, we have recognized that an appellate court has the discretion, in exceptional circumstances, to reach issues not raised below. See United States v. La Guardia, 902 F.2d 1010, 1013 (1st Cir.1990). In United States v. Krynicki, 689 F.2d 289, 291-92 (1st Cir.1982), we outlined the criteria for determining the appropriate exercise of our discretion to hear new issues. These criteria include, inter alia, whether the new issue is purely legal, such that the record pertinent to the issue can be developed no further; whether the party’s claim appears meritorious; whether reaching the issue would promote judicial economy because the same issue is likely to be presented in other cases; and whether declining to reach the argument would result in a miscarriage of justice. Id. The circumstances of this case were sufficiently exceptional to have permitted the district court to consider for the first time on appeal the merits of the federal defenses raised by the FDIC in its receivership capacity. The question of whether various federal defenses barred the Trust’s claims was purely legal and required no further development of the factual record; the FDIC’s federal defenses were colorable, judged by the district court’s acceptance of the FDIC’s D’Oench argument to bar damages on the kickback claims; judicial economy would have been promoted by a ruling on the merits of the applicability of the FDIC’s federal defenses, given the increasing volume of litigation involving federal receivers and/or conservators in this circuit; and finally, it would have been unfair to prevent the FDIC from raising its federal defenses when it had no such opportunity to assert them before the bankruptcy court. As Baumann and McCrory make clear, it is not uncommon for a federal receiver or conservator to become a party to a litigation after the final judgment of the trial court. To prevent the FDIC from raising its federal defenses in such circumstances would vitiate much of the purpose of allowing these defenses in the first place. II. THE D’OENCH DOCTRINE AS A BAR TO THE TRUST’S RECOVERY ON THE KICKBACK CLAIMS We next review the question of whether the D’Oench doctrine, or its statutory counterpart, 12 U.S.C. § 1823(e), bars the Trust’s claims based on the kickback scheme and any equitable subordination against the FDIC as receiver. In D’Oench, the Supreme Court held that in a suit brought by the FDIC to collect on a borrower’s promissory note, in which the FDIC was the successor in interest to the original lender, the borrower was not entitled to rely on agreements outside the documents contained in the lender bank’s records to defeat the FDIC’s claim. 315 U.S. at 460-61, 62 S.Ct. at 681. The Supreme Court announced a federal common law doctrine of equitable estoppel preventing the borrower from using a “secret agreement” with the original lender as a defense to the FDIC’s demand for payment. Id. D’Oench did not require that the borrower have the intent to defraud: “The test is whether the note was designed to deceive creditors or the public authority, or would tend to have that effect. It would be sufficient in this type of case that the maker lent himself to a scheme or arrangement whereby the banking authority ... was or was likely to be misled.” Id. at 460, 62 S.Ct. at 681. The contours of the D’Oench doctrine, which have expanded since the Court’s original decision, are well-established in this circuit. See Timberland Design, 932 F.2d at 48-49; FDIC v. Caporale, 931 F.2d 1, 2 (1st Cir.1991); FDIC v. P.L.M. Int’l, Inc., 834 F.2d 248, 252-53 (1st Cir.1987). Although the D’Oench decision involved the FDIC in its corporate capacity, “courts have consistently applied the doctrine to those situations where the FDIC was acting in its capacity as receiver.” Timberland Design, 932 F.2d at 49 (citing cases). We have also adopted the position of the great majority of the circuits that D’Oench “operates to bar affirmative claims as well as defenses which are premised upon secret agreements.” Id. In addition, D’Oench applies to claims involving secret agreements that sound either in tort or in contract. Id. at 50 (citing Langley v. FDIC, 484 U.S. 86, 108 S.Ct. 396, 98 L.Ed.2d 340 (1987)). And finally, the fact that the FDIC may have actual knowledge of the secret agreement is irrelevant: “The proper focus under D’Oench is whether the agreement, at the time it was entered into, would tend to mislead the public authority.” Id. Applying the principles enunciated in Timberland, the district court held that D’Oench estopped the Trust from raising against the FDIC its affirmative claims based on the kickback scheme. It found that the record established that the Trust, through its agent Benjamin, had “lent itself” to a kickback scheme with the Bank. The district court concluded that the unwritten agreement and subsequent kickback payments between Weiner and Benjamin were a “secret agreement” squarely within the coverage of D’Oench. The Trust contends that D’Oench should not have been applied for the district court for several reasons. It argues that its tort claims of conversion and fraud stand on a factual basis independent of the kickback arrangement, and that these claims therefore cannot be barred by D’Oench. For similar reasons the Trust argues that its breach of contract claim must also be upheld because the removal of $26,300 from the loan proceeds was a breach of the express terms of the written loan agreement, and not a breach of the unwritten kickback arrangement. In the alternative, the Trust invokes certain recognized exceptions to the D’Oench doctrine: it claims (1) that it is a non-negligent victim of “fraud in the factum,” and (2), that the district court should have found that it was innocent of any intentional or negligent deception because Benjamin was not acting as the Trust’s agent at the time he removed loan proceeds for the kickback payments. A. The Scope of the Kickback Agreement We find little merit in the Trust’s first argument, which counsel appears in part to have abandoned during oral argument. As we understand it, the Trust's contention is that because its fraud and conversion claims are “not premised upon” the kickback arrangement, D’Oench cannot apply. According to the Trust, “the kickback arrangement merely explains why Capitol Bank chose to misappropriate the [Trust’s] assets, whereas the misappropriations themselves are the basis of the [Trust’s claims].” Brief for Appellant 604 Columbus Avenue Realty Trust at 27. The problem with the Trust’s position is that the bankruptcy court’s findings in respect to these claims, as well as its equitable subordination of $26,300 in lieu of damages, were in fact explicitly premised on the kickback arrangement. See Bankruptcy Court Opinion, 119 B.R. at 371 (conversion); id. at 374 (fraud); id. at 377 (equitable subordination). Nor does the Trust elaborate as to how other facts, independent of those relating to the kickback arrangement, provide an alternative basis for the bankruptcy court’s findings in its favor. The Trust’s tort claims fall squarely under D’Oench: “D’Oench bars ... affirmative claims ... as long as those claims arise out of an alleged secret arrangement.” Timberland, 932 F.2d at 50 (emphasis added). The Trust next argues that D’Oench does not bar its breach of eon-tract claim against the Bank for the $26,-300 misappropriated from the Trust’s account because this breach was a violation of the written terms of the loan agreement. It relies on Howell v. Continental Credit Corp., 655 F.2d 743 (7th Cir.1981), which held that the FDIC cannot invoke D’Oench “where the document the FDIC seeks to enforce is one ... which facially manifests bilateral obligations and serves as the basis of the [promisor’s] defense.” Id. at 746 (emphasis omitted). Seizing on the language of Howell, the Trust advances much the same argument with respect to the breach of contract claim as asserted in its challenge to D’Oench’s application to its tort claims, i.e., that the “bilateral obligations” of the loan agreement, and not the secret kickback agreement, are the basis for its breach of contract claim. Once again, the Trust’s argument ignores the opinion of the bankruptcy court, which expressly stated that the $26,300 judgment for the Trust on the breach of contract claim was founded on the kickback arrangement. See Bankruptcy Court Opinion, 119 B.R. at 375. The Trust’s reliance on Howell is also misplaced. The Trust’s breach of contract claim required proof of the existence of a secret kickback arrangement. Howell, on the other hand, involved the FDIC’s attempted enforcement of a lease that expressly imposed bilateral obligations on both the lessor and lessee. See Howell, 655 F.2d at 747. The Seventh Circuit ruled that the FDIC, as successor to the lessor, could not assert D’Oench to bar the lessee’s contract defenses. Id. In Howell, the lessee’s contract defenses were not premised on any secret agreement, but were based on the failure of the original lessor to fulfill the express conditions of the lease. Id. The limited exception to the D’Oench doctrine crafted by Howell does not apply to the Trust’s breach of contract claim. B. Fraud In The Factum The Trust further claims that two other recognized exceptions to the D’Oench doctrine apply to this case. The first exception is fraud in the factum. The Supreme Court’s decision in Langley v. FDIC, 484 U.S. 86, 108 S.Ct. 396, 98 L.Ed.2d 340 (1987), while addressed to the issue of the FDIC’s right to invoke D’Oench’s statutory counterpart, 12 U.S.C. § 1823(e), is also applicable to analysis of fraud in the fac-tum as a bar to the application of D’Oench. In Langley, the Court distinguished between the real defense of fraud in the factum, which renders a loan agreement entirely void and takes the agreement out of § 1823(e), and a defense of fraud in the inducement, which renders the loan agreement voidable but does not preclude the FDIC’s assertion of § 1823(e). Langley, 484 U.S. at 93-94, 108 S.Ct. at 402. After reviewing the claim by the note makers that their participation in a land transaction had been procured by misrepresentations as to the size and character of the property involved, the Court concluded that the note makers’ argument was a claim of fraud in the inducement. Accordingly, the Court found that the FDIC could properly invoke § 1823(e) to bar the assertion by the note makers of their fraud defense. Id. at 94, 108 S.Ct. at 403. We think that the Langley Court’s distinction for purposes of § 1823(e) between fraud in the inducement and fraud in the factum applies with equal force in the context of D’Oench. We have characterized fraud in the factum as a real defense that may be asserted when the original lender fraudulently procures the borrower’s signature to an instrument without that borrower’s knowledge of its true nature or contents. See FDIC v. Caporale, 931 F.2d 1, 2 n. 1 (1st Cir.1991) (noting that in the case of fraud in the factum, “the instruments would be void rather than voidable, leaving no title capable of transfer to the FDIC.”). See also E. Allan Farnsworth, Contracts § 4.10 (1982) (describing fraud in the fac-turn as arising m the rare situation in which the defrauded party “neither knows nor has reason to know of the character of the proposed agreement_”). The Trust analogizes its situation to that of the defendant in FDIC v. Turner, 869 F.2d 270 (6th Cir.1989). There, the defendant signed a blank guaranty form to which the name of the debtor and the amount of the guaranty were later added. In addition, the name of the lending bank on the original guaranty was subsequently obliterated with correction fluid and substituted with that of another bank. Id. at 272. When the FDIC sued to enforce this altered version of the loan guaranty, the defendant raised the defense of fraud in the factum. The Sixth Circuit agreed that the defendant was defrauded as to the guaranty’s essential terms, and held that the FDIC was therefore precluded from interposing D’Oench to bar the defense. Id. at 275-76. Review of these cases convinces us that the Trust’s claim was one of fraud in the inducement, and not of fraud in the factum. The bankruptcy court found that the Bank, acting under Weiner’s supervision, falsely represented to the Trust that the consideration for the first loan was limited to the consideration itemized in the original agreement. The Bank’s misrepresentation did not go to the very character of the proposed loan agreement, but only to its underlying terms. Unlike the note maker in Turner, the Trust cannot claim that when it executed the promissory note to the Bank, it was “unaware of the nature of the documents [it] signed.” Caporale, 981 F.2d at 2, n. 1. The Bank, through Weiner, induced the Trust to execute the loan agreement by misrepresenting the consideration involved. There was, however, no fraud in the factum precluding application of D’Oench because there is no evidence to suggest that the Trust did not fully understand the basic nature of the obligation it assumed by entering the loan agreement. The Bank’s extraction of additional $26,300 in consideration from the Trust did not fundamentally alter the nature of the instruments themselves. C. Innocence As A Defense to D’Oench The second exception to D’Oench claimed by the Trust is that it was completely innocent of any intentional or negligent deception. The Trust contends that it could not have “lent [itself] to a scheme or arrangement” which misled the FDIC because Benjamin negotiated and transferred the kickback payments to Weiner without the knowledge of the other beneficiaries of the Trust. The Trust maintains that the district court improperly concluded that the record established that the Trust involved itself in the kickback scheme. Emphasizing that the bankruptcy court found that both Benjamin and the Bank were liable on the conversion count, the Trust claims that Benjamin could not have been acting as its agent or for its benefit when he removed $26,300 in loan proceeds from the Trust’s accounts to make kickback payments. As authority for its claim of innocence as an exception to D’Oench, the Trust cites a footnote to Vernon v. Resolution Trust Corp., 907 F.2d 1101, 1106 n. 4 (11th Cir.1990), which in turn relies on an earlier decision of the Ninth Circuit, FDIC v. Meo, 505 F.2d 790 (9th Cir.1974). Yet in Bau-mann, the Eleventh Circuit expressly rejected Vernon’s suggestion of the continued viability of a “complete innocence” exception: “it is clear that this exception is no longer tenable because lack of bad faith, recklessness, or even negligence is not a defense in D’Oench cases.” 934 F.2d at 1516. See also FSLIC v. Gordy, 928 F.2d 1558, 1567 n. 14 (11th Cir.1991) (observing that innocence doctrine of Meo, in light of Supreme Court decision in Langley, “is based on an outdated understanding” of D’Oench). Baumann emphasized that such an exception would be contrary to the broad purpose of D’Oench to prevent a private party from enforcing against the federal authority “any obligation not specifically memorialized in a written document such that the agency would be aware of the obligation when conducting an examination of the institution’s records.” Baumann, 934 F.2d at 1515. In Timberland, this court also stressed the basic purpose of D’Oench to protect a federal receiver even “where the only element of fault on the part of the borrower was his or her failure to reduce the agreement to writing.” 932 F.2d at 49 (citation omitted). We agree with the Baumann court that the borrower’s state of mind is irrelevant, because the “proper focus under D’Oench is whether the agreement, at the time it was entered into, would tend to mislead the public authority.” Id. at 50. Our earlier cases have never recognized the “complete innocence” exception to D’Oench alluded to by the Trust, and we reject the invitation to adopt it now as the law of this circuit. Our conclusion that there is no “complete innocence” exception to D’Oench is not entirely dispositive of the Trust’s argument. As we understand it, the “innocence” professed by the Trust is not the kind of paradigmatic “complete innocence” formerly recognized as an exception to D’Oench-i.e., a borrower entering into an unrecorded side agreement innocent of any intentional or negligent deception. Rather, the Trust’s claim of “innocence” is really an argument that the actions of Benjamin should not be attributed to the Trust and that the Trust did not actually lend itself to the kickback arrangement. The factual record belies the assertion that Benjamin did not act on behalf of the Trust. The bankruptcy court found that it was Benjamin alone who negotiated the terms of the First Loan Agreement on behalf of Young and her associates. It was Benjamin who at the same time agreed to the kickback arrangement that secured Weiner’s assistance in obtaining approval of the loan by the Executive Committee. At the closing of the First Loan Agreement — at which time the Trust was formally created — a signature card was executed authorizing Benjamin to withdraw funds from the Trust’s loan proceeds account. The bankruptcy court further found that Benjamin was also given authority to access the Trust’s funds in other accounts at the Bank, including one for the restaurant and another for rental income from the Columbus Avenue properties. It seems clear that Benjamin acted with the ostensible authority of the Trust and its principals throughout the negotiation and execution of the First Loan Agreement. The Trust, therefore, cannot disclaim all of Benjamin’s actions with respect to the kickback agreement. Indeed, the Trust is willing to concede that “one could argue that Benjamin was acting as an agent of the [Trust] when he entered into the kickback scheme with Weiner.” Brief for Appellant 604 Columbus Avenue Realty Trust at 32. In these circumstances, the Trust “lent [itself] to a scheme or arrangement whereby the banking authority ... was or was likely to be misled.” D’Oench, 315 U.S. at 460, 62 S.Ct. at 681. Because we find that the district court correctly applied the D’Oench doctrine to bar the Trust’s claims and equitable subordination against the Bank based on the kickback agreement, we do not reach the FDIC’s arguments under § 1823(e). III. THE FEDERAL HOLDER IN DUE COURSE DOCTRINE AS A BAR TO THE TRUST’S CLAIMS AND EQUITABLE SUBORDINATION AGAINST THE FDIC IN- ITS RECEIVERSHIP CAPACITY We turn next to the FDIC’s principal argument on appeal: that the district court erred when it held that the federal common law holder in due course doctrine did not bar the Trust’s claims against the FDIC in its receivership capacity and the equitable subordination of the FDIC’s secured interest in the Trust’s bankruptcy estate. The FDIC addresses this argument to the bankruptcy court’s judgment against the Bank for $111,711.66 on the Trust’s conversion and breach of contract claims for misapplication of loan proceeds for payment of interest, taxes and other soft costs. The FDIC has conceded in this case that D’Oench does not bar the Trust’s claims based on breach of the soft costs provisions of the two loan agreements. Instead, the FDIC insists that policy concerns similar to those underlying the D’Oench doctrine militate in favor of expanding the federal holder in due course doctrine to the FDIC in its receivership capacity when, as here, there has been no purchase and assumption transaction by the FDIC in its corporate capacity. A. Origins of the Federal Holder in Due Course Doctrine In order to evaluate the strength of the policy concerns that the FDIC asserts as the basis for extending the federal holder in due course doctrine to the FDIC in the circumstances of this case, we first examine this doctrine as it has emerged in cases involving purchase and assumption transactions by the FDIC in its corporate capacity. The germinative opinion in the development of the federal holder in due course doctrine was Gunter v. Hutcheson, 674 F.2d 862 (11th Cir.), cert. denied, 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63 (1982). In Gunter, the FDIC in its corporate capacity acquired a promissory note after a purchase and assumption transaction involving a failed Tennessee bank. The note makers brought suit for rescission of the note held by the FDIC on the basis of, inter alia, fraudulent misrepresentation by the directors of the failed bank. Id. at 866. The FDIC counterclaimed for payment of the note in the district court, asserting that § 1823(e) barred the note makers’ claims, and arguing in the alternative that federal common law gave it a defense against claims of fraud of which it lacked knowledge. Id. at 866-67. Although the Gunter court rejected the application of § 1823(e) to bar the note maker’s fraud claims, it accepted the FDIC’s argument that a federal common law rule of nonliability against these claims was necessary in order for the FDIC to accomplish its statutory objectives. In reaching this conclusion, the Gunter court applied the Supreme Court’s test for determining whether the implementation of a federal program would be frustrated without the adoption of a uniform federal rule. See United States v. Kimbell Foods, Inc., 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711 (1979). Applying Kimbell Foods, the Gunter court stressed the FDIC’s duty to promote “the stability of and confidence in the nation’s banking system,” id. at 870, and the preferred status of the purchase and assumption transaction as a means of accomplishing this duty because “it avoids the specter of closed banks and the interruption of daily banking services.” Id. The court noted that speed was of the essence in a purchase and assumption transaction because of the need to preserve the going concern value of the bank: [T]he FDIC must have some method to evaluate its potential liability in a purchase and assumption versus its potential liability from a liquidation. Because of the time constraints involved, the only method of evaluating potential loss open to the FDIC is relying on the books and records of the failed bank to estimate what assets would be returned by a purchasing bank and to estimate which of those assets ultimately would be collectible. Id. After considering the impact of the federal rule on settled commercial expectations ordinarily governed by state law, the court concluded that protection of the FDIC from unknown fraud claims “far outweighed” any potential damage to these expectations. Id. at 872. The court therefore announced a federal common law holder in due course rule applicable to the FDIC in its corporate capacity: [A]s a matter of federal common law, the FDIC has a complete defense to state and common law fraud claims on a note acquired by the FDIC in the execution of a purchase and assumption transaction, for value, in good faith, and without actual knowledge of the fraud at the time the FDIC entered into the purchase and assumption agreement. Id. at 873. Gunter thus expanded federal common law to bar fraud claims by the note makers that would not otherwise have been barred by the D’Oench doctrine or § 1823(e). See id. at 872 & n. 14 (noting that D’Oench doctrine and § 1823(e) embody a “more limited” policy of protecting the FDIC). This court has adopted the rule of Gunter. See Southern Indus. Realty, Inc. v. Noe, 814 F.2d 1 (1st Cir.1987) (per curiam). See also FDIC v. Bracero & Rivera, Inc., 895 F.2d 824, 828-29 (1st Cir.1990) (dicta acknowledging holder in due course doctrine’s availability to the FDIC in its corporate capacity). Other circuit courts have expanded the federal common law holder in due course doctrine to bar all personal defenses against the FDIC, and have looked to state law principles in order to distinguish between real and personal defenses. See Campbell Leasing Inc. v. FDIC, 901 F.2d 1244, 1249 (5th Cir.1990); FDIC v. Wood, 758 F.2d 156, 161 (6th Cir.) (the FDIC “takes the note free of all defenses that would not prevail against a holder in due course.”), cert. denied, 474 U.S. 944, 106 S.Ct. 308, 88 L.Ed.2d 286 (1985). See also FDIC v. Bank of Boulder, 911 F.2d 1466, 1474-75 (10th Cir.1990) (en banc) (adopting federal rule of transferability of letters of credit protecting FDIC in its corporate capacity during purchase and assumption), cert. denied, - U.S. -, 111 S.Ct. 1103, 113 L.Ed.2d 213 (1991). In all of these cases, the underlying rationale for a federal holder in due course rule has been consistent with that articulated by Gunter: to promote purchase and assumption transactions. See Wood, 758 F.2d at 160-61 (federal holder in due course rule necessary because “the essence of a purchase and assumption transaction is speed”); Campbell Leasing, 901 F.2d at 1248-1249 (same analysis); Bank of Boulder, 911 F.2d at 1474-75 (uniform rule of transferability necessary because of time constraints of purchase and assumption). B. Application Of The Federal Holder in Due Course Doctrine To The FDIC As Receiver The FDIC argues that the federal holder in due course rule should be available to it in its capacity as the Bank's receiver. The FDIC insists that in order for it to decide whether a purchase and assumption or a liquidation is the least costly approach to disposing of the assets of a failed bank, it must be able to make that decision based on absolute reliance on the bank’s records, unimpeded by personal defenses. The FDIC also asserts that if the federal holder in due course doctrine is limited exclusively to purchase and assumption transactions, it will be unable to employ a variety of newly-developed “hybrid” transactions for the resolution of bank failures that include elements drawn from both a liquidation and a purchase and assumption. Accordingly, the FDIC urges that we hold that the federal holder in due course doctrine applies to the FDIC in its receivership capacity, regardless of whether a purchase and assumption transaction is consummated. To support its argument, the FDIC relies on several cases in which the FDIC in its receivership capacity was allowed to invoke the federal holder in due course doctrine to bar the makers of promissory notes from asserting their personal defenses. But these cases involved notes acquired by the FDIC as receiver after a purchase and assumption transaction. For example, in Campbell Leasing, the FDIC was appointed receiver of a failed Texas bank and arranged for a purchase and assumption transaction with a federally-established bridge bank, NCNB. 901 F.2d at 1247. During the purchase and assumption, NCNB acquired a promissory note that had previously been the subject of a lawsuit by the note maker against the failed bank. As receiver of the failed bank, the FDIC, along with NCNB, moved for summary judgment on the note maker’s claims and on a counterclaim for enforcement of the note, arguing that the D’Oench and federal holder in due course doctrines barred all the note maker’s claims and affirmative defenses. Id. The district court granted summary judgment for the FDIC and NCNB, and the Fifth Circuit affirmed the judgment on appeal. The court observed that it could find no logical reason to limit federal holder in due course protection to the FDIC in its corporate capacity, to the exclusion of its receivership function. In its corporate capacity, the FDIC is obligated to protect the depositors of a failed bank, while the FDIC as receiver must also protect the bank’s creditors and shareholders. In both cases, the holder in due course doctrine enables the FDIC to efficiently fulfill its role, thus minimizing the harm to depositors, creditors, and shareholders.... We conclude that the FDIC enjoys holder in due course status as a matter of federal common law whether it is acting in its corporate or receivership capacity. Id. at 1249 (citations omitted). The FDIC argues that because the protections of the federal holder in due course doctrine have been available to it in its receivership capacity in cases like Campbell Leasing, the logical next step is to apply the doctrine to the FDIC in its receivership capacity regardless of whether a purchase and assumption transaction has occurred. According to the FDIC, this extension of the federal holder in due course rule is necessary to enable it to decide properly whether a liquidation or purchase and assumption is the least costly means of dealing with the failed bank. In its briefs in this appeal, however, the FDIC has neglected to mention the one decision that has directly addressed this argument. In FDIC v. Laguarta, 939 F.2d 1231 (5th Cir.1991), the FDIC argued that it was entitled to invoke the federal holder in due course doctrine to bar any defenses against enforcement of a promissory note acquired by it directly in its capacity as receiver. Id. at 1233-35. After observing that the FDIC’s federal holder in due course argument had been raised in a “belated supplemental brief,” the Fifth Circuit dismissed it peremptorily in a footnote: Here the FDIC sues only in its capacity as receiver for the institution which made the loan and is payee in the note sued on, and the FDIC does not assert, nor does the record establish, that the loan or note has ever been transferred or was ever part of a purchase and assumption transaction. To the extent that it precludes defenses beyond tho