Replies to post #8168 on Corus Bankshares Inc. (fka CORSQ)

[bowman88]

That doesn't sound too good for our tax refunds :(

C'mon guiseppi I was hoping for some good news going into the weekend haha. Thanks for sharing the link anyways. I'm sure a potential sponsor has had to examine all angles and possible outcomes.

[errett]

guiseppi---I'm probably too jaded to have a clear perspective on this. This government is broke, and on the verge of a major downward move in the housing sector in many regions in this country. The FDIC will be taking more banks into receivership in 2011, '12 and possibly for a number of years after that. So they need the money, since the FED will be forced to stop printing when the currency they have already dumped into the system finally makes its way into the economy. This failed monetary policy will radically drive up inflation to levels none of us have seen in close to three decades, or possibly have never seen, given the heated competition with Asia for commodities. They understand what the issues are in Washington, and that they are in a very serious situation, so my guess is the FDIC plays hardball and takes it all. In the recent POR denied by the Judge in the WMI (WAMUQ) BK the Judge said that she didn't think it likely that the debtors could prevail in litigation against the FDIC. If you want to know where we may be headed search under Weimar Republic.

http://www.marketoracle.co.uk/Article10759.html

JMHO as always---:) errett

[tweaktheflange]

I signed up for the free trial. Here is the full article for those interested:


Bankruptcy Judge Halts Corus Tax-Refund Suit Against FDIC
Patrick Fitzgerald

January 13, 2011



A bankruptcy judge has put the brakes on a lawsuit filed by Corus Bankshares Inc. against the U.S. Federal Deposit Insurance Corp., a tactical victory for the regulator in its fight with the former owner of Corus Bank over the rights to more than $250 million in tax refunds stemming from the bank's collapse.

Judge Pamela S. Hollis of the U.S. Bankruptcy Court in Chicago said she would stay a lawsuit filed by Corus Bankshares over the tax refunds until a district-court judge rules on the FDIC's bid to have the case transferred out of bankruptcy court.

The FDIC, the federal agency that manages the receiverships of failed banking institutions, took over the bank's estate upon its collapse in September 2009 and sold the bank's $7 billion in deposits to Chicago's MB Financial Inc. An investment consortium led by Starwood Capital Group later purchased the bank's $4.5 billion portfolio of construction loans and real estate in a deal valued about $2.8 billion.

About nine months later, in June 2010, Corus filed for Chapter 11 bankruptcy protection. Since the bankruptcy filing, Corus, like a number of other bank-holding companies in Chapter 11, has battled the FDIC over the ownership of the tax refunds.

The FDIC says the bankruptcy court has no authority to rule on such a lawsuit. Federal banking law mandates that decisions made in the receivership process can only be appealed to a district court, the agency said.

Lawyers representing Corus and the FDIC weren't immediately available for comment.

At least a dozen former bank-holding companies are under Chapter 11 protection across the country, the result of hundreds of bank closures by regulators in recent years.

Many of these cases, including those of holding companies Colonial BancGroup Inc. and BankUnited Financial Corp., involve similar litigation with the FDIC over ownership of tax refunds and other assets.

The tax-refunds at issue in Corus' case stem from substantial losses the Chicago-based bank posted in 2008 and 2009.

Corus Bankshares says it is entitled to those funds, which would provide some cash to repay creditors, including bond investors owed more than $416 million.

The FDIC, however, says the refunds are the property of Corus Bank and therefore belong to it as the bank's receiver.

Corus Bank, whose business was concentrated on condominium-development projects, suffered when the housing market crumbled. The FDIC estimates Corus' collapse will cost its insurance fund $1.7 billion.

Document DJFDBR0020110113e71d000dy