WASHINGTON — After two and a half years of failures nearly every Friday, and a pile of about 350 collapsed banks, one former management team of a shuttered thrift has decided to fight back.

The former United Western Bank, a $2 billion-asset Denver thrift, along with its holding company and key principals, became the first plaintiffs during the current financial crisis to mount a court challenge to a failure. In a lawsuit filed Friday, they claim that the Office of Thrift Supervision and Federal Deposit Insurance Corp. undermined their recovery plan and locked their doors prematurely.

Though some other failed-bank managers have objected to their institution's collapse, arguing that it was unnecessary, United Western executives are suing in an attempt to force the thrift's reopening — an attempt that has not been made for more than a decade.

The plaintiffs' attorney said the suit is a line in the sand against regulators who have become overzealous in the wake of the crisis and are closing banks too hastily.

"We're in a period of time when the regulators are sometimes moving too quickly to seize banks, and once they decide that that's what they want to do, they're working to create a record to close banks rather than working with community banks to try to enable them to succeed," said Andrew Sandler, a partner in BuckleySandler LLP who represents the former thrift's management. "This is an extreme case of that, but it's not the only case."

The lawsuit, Sandler added, "may be helpful in creating a course correction."

Filed in U.S. District Court in Washington, D.C., the suit essentially seeks to nullify the failure, transferring control of the institution from the FDIC back to the former managers. (Upon seizing United Western on Jan. 21, the FDIC sold its assets and deposits to First Citizens Bank in Raleigh, N.C.)

The suit alleges that United Western was "economically viable" at the time of its closure and that the two agencies did not appear sincere about engaging with the management team on a recapitalization plan. The suit says the thrift had lined up strong interest from investors, promising $200 million in capital, which was needed to help United Western recover from significant writedowns related to its portfolio of mortgage-backed securities.

But despite the need for regulatory approval before the investors would commit themselves, the OTS and FDIC did not act on the capital plan, the suit alleged. The plaintiffs said the OTS gave the principals seven days to put its capital restoration plan into action, though the regulator could have granted as much as 45 days. The "only reason" the thrift became undercapitalized, they said, was because the OTS forced the writedowns.

"But for the OTS' arbitrary and capricious directive, the bank would have remained with the technical definition of adequately capitalized and not been subject to the requirement that it submit a" capital restoration plan, the suit said.

The plaintiffs also allege that, though regulators had for years supported the thrift's business model, using deposits from institutional investors such as 401(k) plans, they suddenly objected to that strategy and urged the thrift to raise more traditional core deposits.

Institutional deposits had made up more than 70% of the thrift's deposit base.

"In 2010, defendants suddenly rejected the bank's business model and commenced an arbitrary and capricious course of action that culminated in the unlawful seizure of the bank," the lawsuit said.

The OTS, as the primary supervisor, was the agency charged with determining when to close the bank. But the suit also names the FDIC as a defendant, asserting that it participated in the aggressive regulatory actions in the thrift's final days. These included the agency's sudden classification of institutional deposits as "brokered," which led the OTS to view the thrift's funding base as unstable, the suit said. Ultimately, the OTS determined that the thrift was suffering severe liquidity strains.

(The FDIC declined to comment on the pending litigation. An OTS spokesman said, "The OTS had solid grounds for closing United Western. We will vigorously defend the lawsuit.")

"The liquidity concerns asserted by the OTS and FDIC were based on their unfounded disapproval of the bank's 17-year-old business model and a fundamental misunderstanding of the bank's long-term, contractual relationships with the institutional depositors," the suit said.

Attorneys for United Western said the sudden classification of the deposits essentially created a liquidity crisis.

"There was no liquidity crisis. They closed this bank because they prophesied that there could be a liquidity crisis," said Sandler.

Lawrence Kaplan, an attorney at Paul, Hastings, Janofsky & Walker, who is also representing parties in the case, said the agencies did not do enough homework to make sure their analysis of the institution was correct.

"Notwithstanding 17 years of operation, it was clear the agencies did not have a complete understanding of the operations," he said; "nor when they started to question the operations did they want to take the time to listen to the answers."

Former executives had already objected to regulators' tactics. Guy A. Gibson, the chairman of United Western Bancorp Inc. issued a press release the night the thrift failed calling the action "precipitous."

Though former bankers tried to overturn failure decisions during the savings and loan crisis, the United Western case is believed to be the first of its kind since the 2008 turmoil.

Some observers said the boldness of the case, and involvement of Washington law firms, may mean it has some merit.

"What motivates the … chairman in this case to sue when we have had 400-some-odd banks that failed but have not sued?" said Robert DeYoung, a professor at the University of Kansas business school and a former FDIC economist, though he added that he had not seen the case.

But Mark Flannery, a finance professor at the University of Florida, said it is unusual to accuse agencies of closing banks too soon.

"We've all heard the stories about how regulators are treating banks indiscriminately or how their treatment changes over time," he said. "But my experience has been that, when the supervisors actually close the bank, it's probably closing the bank late instead of early."

Flannery, who also had not seen the lawsuit, added that regulators have broad authority to determine when a closure should take place.

"Essentially, if a bank is not operating in a safe and sound manner, the regulator can close the bank. The regulator is also the one that determines what constitutes safety and soundness," he said.

Still, the increasingly positive conditions in the industry have been seen as helping ailing banks recover.

"As the economy improves you would think that the threshold for closing troubled banks might be relaxed some. The cash flows over the next few quarters you would presume would be better than during the depths of a recession when the majority of these banks were closed," said DeYoung.

"I'd be more willing to listen to" United Western's "argument in January of 2011 than in January of 2009," he said.