Looking to "de-consolidate" a division - ln search of insight...

We have a division of our company that we wish to separate from, with a goal of ensuring it is de-consolidated. We could sell it outright, but market conditions are poor and a successful sale is highly unlikely. We could shut it down, but that poses huge customer risks and large shut-down and severance charges.

An alternative is for us to allow division management to buy the unit from the parent in exchange for debt (so the deal would be seller-financed) and a less-than-20% equity stake (so the parent would own a piece of the new private company, but stay below the minority interest threshold). Part of the debt would be for working capital to get the division successfully through 2010 and make a running start at 2011. Assuming we don’t have any of the usual indicia of control (board seats, special voting rights, etc.) and this is thus genuinely a separate, private company, would this work (and be de-consolidated)?

I think the rules in this area, like FIN 46R, recently changed for the better, but wonder if anyone else has seen this done successfully. Many thanks for any comments.

BTW, I am asking this for a CFO friend of mine who, for disclosure reasons, cannot ask for himself. No, really.