Corus Bankshares Inc. (fka CORSQ)

[momentum74]

Now they are saying 260 million dollar refund link/pasted
http://www.chicagobusiness.com/cgi-bin/news.pl?id=37365

Failed Corus due $261M tax refund; shareholders miss out
By: Steve Daniels March 09, 2010 (Crain's) — Like Broadway Bank’s owners, the holding company for failed Corus Bank will be getting a big tax refund from the federal government.

But unlike the Giannoulias family — sole owners of Chicago-based Broadway, which will fail without an $85-million capital infusion — shareholders of Chicago-based Corus Bankshares Inc. won’t see any of that money.

Instead, the Federal Deposit Insurance Corp., which last year estimated its insurance fund would take a $1.7-billion loss on the Corus failure, will wrestle with other creditors for $261 million in tax refunds that the bank holding company said it’s due in a Securities and Exchange Commission filing Monday.

The difference lies in the tax status for the two bank holding companies.

As a subchapter S corporation, Broadway Bancorp doesn’t pay taxes itself. Instead, tax liabilities are passed onto shareholders. Similarly, any tax refunds go to shareholders directly rather than to the company.

Crain’s reported in this week’s issue that the Giannoulias family is due a tax refund of between $12 million and $15 million for 2009 losses. Former Broadway Bank executive, Illinois Treasurer Alexi Giannoulias, is the Democratic nominee for U.S. Senate.

Both Mr. Giannoulias and his brother Demetris, the bank’s CEO, said last week that they would support putting that refund toward recapitalizing the bank if they can find outside investors to provide tens of millions in additional capital, something Alexi Giannoulias said is unlikely. So, it appears the family will keep the refund if $1.2-billion-asset Broadway fails.

But Corus, which still exists as a holding company even though the bank’s deposits and assets have been sold, does pay corporate taxes, so any refunds go to the company rather than the shareholders. And the company has debts outstanding with the FDIC, bondholders and others.

In its filing, Corus said it expects the FDIC to lay claim to its tax refunds for 2008 and 2009, which add up to $261 million. But it said it believed “the tax refund will be generally subject to the claims of all the company’s creditors, including the FDIC. . . .At this point in time, it cannot be reasonably determined how this matter will ultimately be resolved.”

Corus added, “Given the company’s outstanding obligations and other contingencies, the company presently does not believe that there will be any assets remaining to be distributed to its common shareholders.”

Corus said that possible future courses of action include filing for Chapter 11 bankruptcy protection or liquidation.

Corus, one of the nation’s largest lenders to condominium developers with $7 billion in assets, fell victim to the real estate collapse as bad loans overwhelmed what had appeared to be a conservative capital cushion.

On a smaller scale, Broadway also has stumbled on a high concentration in commercial real estate and development loans.

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Karen M. wrote:
Dear Chris,
don't think you will be much of a loss.
3/9/2010 4:29 PM CST on Chicago Business
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Ted G. wrote:
I am not a fan of Giannoulias, however, the article does not state if the FDIC will be forced to use any government funds if the bank fails, or if the government will gaurantee any of the assets when they are sold to other banks. It is also not clear if the bank has any other creditors. If there are creditors (government or private) then they should certainly be entitled to any tax refunds. If not, then the family should get the money.
3/9/2010 4:14 PM CST on Chicago Business
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CHRIS B. wrote:
Until this country gets back to ruling with some "common sense" vs. ruling by "the letter of the law" - the very laws conjured up by greedy politicians and lawyers - We Are Doomed as a Nation! For the Giannoulias' to receive personal gains from tax refunds on a failed venture/bank is despicable. The FDIC needs to seize these funds for the tax payers despite the "letter of the law". If this guy wins the IL Senate seat I'm moving.
3/9/2010 3:37 PM CST on Chicago Business
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