Few now believe that Northern Rock has any chance of continuing as an independent entity. Its executives are scrambling now to find a way to keep the rock floating while a deal to sell the bank or find a cash-rich partner can be put together.

Over the weekend, rumors began spreading that several hedge funds might bid on Northern Rock’s mortgage book, hoping to pick up the home loans at a significant discount. Chris Flowers, a former Goldman Sachs banker who now runs his own shop called JC Flowers, may be joining with Citadel and Cerberus to bid on the assets, according to a report in the Sunday Telegraph. may join with hedge funds Cerberus Capital Management LP and Citadel Investment Group LLC to split up the U.K. lender, The Sunday Telegraph reported, citing an unidentified person familiar with the proposal.

Flowers first came to public attention when he lead the consortium of new creditors that bailed out Long Term Credit Bank, and in the process made a hefty profit. JC Flowers led the consortium of investment firms and banks buying Sallie Mae. Citadel has gained a reputation for picking-up the assets of financially strained companies at a steep discount. Last year it bought Amaranth’s assets as that hedge fund collapsed and this year it bought assets from Sowood.

King of the dealmakers [Sunday Telegraph]