Private equity firms face several challenges in taking over banks. Not least of those is the government's reluctance to hand over banks to firms that are known for targeting big payoffs laced with leverage, rather than the prudent lending and sustainable, moderate growth bank regulators are charged with fostering.

But private equity firms must also be able to price entities whose troubles stem from assets that are difficult to value. They have to place bank assets into a "silo" fund that is kept entirely separate from other investments, and they may have to disclose sensitive information about fund investors and operations.

They must also have a business plan in place for the next few years, and a management team capable of carrying out that plan. And because of rules limiting the ownership stake one firm can have, several PE funds must be involved for an outright takeover -- providing ample ground for clashes over culture and management ideas.

"It's hard enough to do a deal with a club of two, much less a club of five," says Joshua Siegel, managing principal of the private equity firm StoneCastle Partners, which is actively engaged in negotiations.

Still, with hundreds of bank failures expected to occur before the end of next year, many firms smell profit in the rubble. Those who participated in the IndyMac deal, including bank-takeover veteran J. Christopher Flowers , have not been shy about touting its prosperity. And many remember handsome rewards of the last banking calamity -- the collapse of hundreds of savings & loan institutions during the 1980s and 1990s -- when investors snapped up assets from the Resolution Trust Corp. at steep discounts, only to see profits surge.

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