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CHICAGO-A Starwood-led group, including of TPG Capital, Perry Capital and WLR LeFrak has won the right at auction to purchase a portion of an LLC holding a $4.5-billion of assets from the defunct Corus Bank. The group will drop $554 million for a 40% stake in the LLC which carries troubled real estate loans mostly associated with condominium projects. The FDIC, meanwhile, will hang onto the other 60% of Corus Construction Ventures, LLC and will provide financing with a 0% coupon for 50% of the purchase price of the LLC. According to a release, “the FDIC will also extend up to a $1 billion facility for working capital purposes and to fund project completions.” Starwood will take over day-to-day management of the portfolio.

The portfolio consists of “100 loan and REO assets linked to high-quality condominiums, multifamily housing, office properties, and land, representing nearly 23 million square feet,” says Starwood’s release. There were eight bidders that competed for this portfolio in an auction for the limited liability company holding the $4.5-billion unpaid principal balance.

Corus Bank was seized by the FDIC on Sept. 11th, 2009, at the time holding $7 billion in assets and $7 billion in deposits. MB Financial Bank agreed to purchase the majority of the deposits as well as roughly $3 billion of assets in late September. Prior to this deal, MB owned $8 billion in assets. Corus Bank was the largest bank failure of the year with 11 branches throughout Illinois.

For more on distressed assets, check out the premier issue of our “Distressed Assets Investor” here: http://anax5a.pressmart.com/DistressedassetsInvestor/index.aspx

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