July 16 (Bloomberg) -- U.S. regulators are poised to seize Corus Bankshares Inc., the Chicago lender crippled by loans for condominium construction, and are preparing to auction the entire company or its assets, people briefed on the matter said.

The Federal Deposit Insurance Corp. has indicated the bank may be taken over by the government within the next several weeks, said the people, who declined to be identified because the talks are private. Thomas Barrack’s Colony Capital LLC and Related Cos., the developer of New York’s Time Warner Center, are among the investors who’ve expressed interest in Corus’s assets, people with knowledge of the talks said June 4.

Corus’s fate has shifted into the hands of the FDIC because the lender and its financial adviser, Bank of America Corp., haven’t found a buyer willing to complete a deal in the absence of government assistance. After closing BankUnited Financial Corp. and IndyMac Bank, regulators agreed to loss-sharing provisions when selling them to investors this year.

“Real estate has a ways to go down and when a bank is in that type of trouble, they can’t raise money privately,” said Steven Kaplan, a professor the University of Chicago Booth School of Business. “This is the kind of situation where private equity thrives, where there are hard-to-value assets and where there’s not much liquidity.”

Andrew Gray, a spokesman for the FDIC, declined to comment. Randy Curtis, Corus’s interim chief executive officer, didn’t reply to phone calls. Representatives of Colony and Related declined to comment.

Facing Receivership

The FDIC, led by Sheila Bair, is wrestling with the role private investors should play in the resolution of the banking crisis. After facilitating the sale of BankUnited and IndyMac to private-equity groups, the regulator proposed takeover rules two weeks ago that buyout managers said would deter them from pursuing future deals.

U.S. regulators told Corus that it was undercapitalized as of May 1, and said they may place the bank into receivership if it failed to satisfy capital requirements, according to a May 18 filing with the U.S. Securities and Exchange Commission. The company’s nonperforming assets more than quadrupled to $2.5 billion as of March 31, the filing showed. It listed reserves of $338.6 million and reported a first-quarter loss of $285 million.

Corus dropped 3 cents, or 11 percent, to 24 cents a share at 4 p.m. in Nasdaq Stock Market composite trading. The shares have plunged 92 percent in the past year.

“Corus, with a portfolio consisting primarily of condominium construction loans, many in the hard-hit areas of Arizona, Nevada, south Florida and southern California, has seen a rapid and precipitous decline in the value of the collateral securing our loan portfolio,” the lender said in the filing.

Miami Condos

The bank, incorporated in 1958, had a $5.4 billion commercial real estate loan portfolio as of March 31, including $997 million to condominiums in Miami and southeast Florida, according to company filings.

Condominium prices in the Miami area slumped 39 percent at the end of the first quarter compared with a year earlier, the fifth-largest decline for a U.S. metropolitan area, according to the National Association of Realtors.

Colony, which has invested more than $39 billion since billionaire Barrack founded the Los Angeles-based firm in 1991, bought assets from the Resolution Trust Corp., the U.S. agency that disposed of failed lenders after the collapse of the savings-and-loan industry in the 1980s. More recent investments include the Savoy Group, which it bought with Blackstone Group LP in 1998, and the Meadowlands Xanadu Project in New Jersey.

Related, founded in 1972 by Miami Dolphins owner Stephen Ross, 69, has more than 10,000 Florida residential units under development, according to its Web site. The firm says it oversees more than 21,000 apartments and more than 1 million square feet of commercial and retail space in nine states.

To contact the reporters on this story: Jason Kelly in New York at jkelly14@bloomberg.net; Jonathan Keehner in New York at jkeehner@bloomberg.net.

Last Updated: July 16, 2009 19:48 EDT