Lets get real. It was $500 million in the so called bad bank as at 31 December 2009. Since then its been steadily downhill, just look at how the realisable value of the Hanover loan book has been written down, many more loans from the so called good bank would now be impaired or have gone bad, there's around $300m of related party transactions that any new investor won't want to know about, so it could easily be $1b that's in the too hard basket, which the Govt will be expected to pick up at par value in any potential bailout. Just what they might relaise out of this allmighty mess is anyone's guess but it wouldn't surprise me in the slightest if they got a $600-800m hiding.
The Govt are between a rock and a hard place as even if they buy this incredibly huge bunch of "so called" assets at par value, there's no assurance they won't be called on again before December 2011 if the new owner gets into trouble trying to climb the December 2011 wall of maturities.
The answer to me is to simply initiate Receivership or Statutory management of SCF and allow Sandy time to work the situation to mitigate the loss as much as possible. SCF as a brand are finished, its time to stop the pretence.