WASHINGTON — A Chicago banking company that has warned it may soon fail now faces lawsuits alleging it improperly manipulated asset values.

The suits, which are seeking class-action status, accuse the $8.4 billion-asset Corus Bankshares Inc. and affiliated companies of paying above-market prices to buy condominium units in developments that Corus had financed in an attempt to inflate their collateral values.

"The company … inflated appraisal values to delay recognizing losses on Corus-financed condominium developments," according to the lawsuits, which were filed by Corus shareholders. As a result, the company "failed to properly recognize losses on its condominium loans in accordance with generally accepted accounting principles."

The allegations could add complications to any attempt to save Corus from failure and could increase resolution costs for the Deposit Insurance Fund.

The lawsuits, which were filed during the past two months and would need to be consolidated to receive class-action status, claim that by failing to disclose the alleged manipulation, Corus made false statements about its condition to investors who bought its stock during the year that ended Jan. 30.

The suits cite a January report in the South Florida Business Journal that Colonnade Artech Owner, a company managed by four Corus executives, bought four units in a condo development for $5.5 million. The development, Artech Residences at Aventura, was financed by Corus Bank.

According to the report, Colonnade Artech Owner shared an address with the Chicago bank.

The allegations are another black mark for Corus, which has suffered heavy losses from bets it made in the condo development market.

The company announced late last week that Robert J. Glickman, its president and chief executive officer, and Joseph C. Glickman, his father and Corus' chairman, had unexpectedly resigned for "personal reasons."

Corus Bancshares lost $316.7 million in the fourth quarter after earning $1.9 million a year earlier. It had $2 billion of nonperforming loans, or more than half the bank's portfolio.

Representatives of Corus Bancshares did not return repeated calls for comment. A spokesman for the Office of the Comptroller of the Currency, which regulates the bank, declined to comment.

The agency hit Corus with a sweeping consent order in February, which ordered, among other things, that the bank improve its appraisal procedures. That month, the bank also announced a written agreement with the Federal Reserve Bank of Chicago.

Daniel Cardenas, an analyst at Howe Barnes Hoefer & Arnett Inc. in Chicago, said Corus had suffered from an "exodus" of managers. "A couple of CFOs have left. Their chief lending officer left. Everybody has kind of walked out the door for various reasons. That's never a good sign," Cardenas said. "The level of nonperforming loans is just skyrocketing. … All the signs are pointing to a failure."

Some observers said the implications of the charges could be significant if Corus manipulated values to hide losses.

"If that pumping up of prices was going on, that would suggest that Corus' problems are even bigger than acknowledged so far," said Bert Ely, an independent consultant based in Virginia.

Such manipulation is not unprecedented, but it is still "clearly improper," Ely said.

"To the extent that there are those practices, I would think they would be a safety-and-soundness violation, because what they're trying to do is basically avoid writedowns," he said. "They overstate their net worth, and they look stronger than they really are. ... It leads to overstated values and therefore understated losses."

John Douglas, a former general counsel at the Federal Deposit Insurance Corp., noted a variety of possible reasons for Corus to acquire units in developments that had received loans, but he also said that the exact circumstances of the transactions are still unclear.

Douglas, now a partner at Paul, Hastings, Janofsky & Walker LLP, said the sales could have been meant simply to advertise that the development was more popular to buyers than it was, or the company may have been trying to prop up its balance sheet. "You could certainly see that there could be motivation on the part of the bank to want to have higher values for these units, because it would mean a higher carrying value for the real estate that it owned and a lower reserve value for the unpaid balance of the loan," Douglas said.

Steven J. Toll, an attorney representing one of the groups of plaintiffs, said it is unlikely that Corus or anyone associated with the company were purchasing units for legitimate purposes.

"Anything is possible" but "in this market that we're in, it's not logical that someone would be buying units at above-market prices, unless there is some other undisclosed reason for doing so," said Toll, a partner in the Washington office of Cohen Milstein Sellers & Toll PLLC.

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