Accredited Home Lenders: court confirms amended plan of liquidation

By Lisa Kerner

Charlotte, N.C., May 19 - Accredited Home Lenders Holding Co.'s amended plan of liquidation was confirmed by the U.S. Bankruptcy Court for the District of Delaware on Thursday, according to an attorney familiar with the case.

The disclosure statement was approved on April 7.

As previously reported in February, Accredited Home filed an amended plan and related disclosure statement to change the proposed distribution to several creditor classes.

Under the plan, a plan administrator will liquidate the assets of the consolidated holding company and distribute proceeds to creditors. Under the original plan, the liquidation proceeds were to be distributed to creditors through a liquidating trust.

The liquidating trust will still be established to liquidate the consolidated debtors' assets and distribute those assets to creditors.

In addition, the plan settles all claims that the consolidated debtors may have against Lone Star Fund entities in exchange for payments from the Lone Star entities and some insurers to the company and some creditors in amounts exceeding $49.75 million.

Also, roughly $100 million in claims asserted by the Lone Star entities will be subordinated or waived.

Creditor treatment

Treatment of creditors under the amended plan will include:

• Holders of administrative claims, priority claims and priority tax claims will be paid in full in cash;

• Holders of secured claims will either be paid in full in cash, receive the assets securing the claims or have their claims reinstated;

• Holders of general unsecured claims against the consolidated holding company will receive a share of any holding company assets made by the plan administrator, subject to subordination provisions;

• Holders of general unsecured claims and REIT junior claims against the consolidated debtors will receive a share of liquidating trust interests;

• The Lone Star entities will receive no distribution on account of their unsecured claims;

• Holders of holding company convenience claims will recover 65% in cash;

• Holders of consolidated debtor convenience claims will recover 75% in cash;

• Holders of claims against the holding company related to Accredited Preferred Securities Trust I will be deemed fully satisfied and paid in full by a Lone Star trust preferred settlement payment and trust preferred holding company distributions;

• Holders of REIT preferred holders subordinated guaranty claims will receive no distribution until all senior unsecured claims have been paid in full. Otherwise, these creditors will receive no distribution. If the senior claims are paid in full, they would receive subsequent distributions and a share of residual assets;

• Holders of subordinated claims will receive no distribution until other claims have been paid in full, in which case they will receive a share of subsequent distributions and residual assets; and

• Interest holders will receive no distribution unless all other claims are paid in full.

Accredited Home is a San Diego-based mortgage banker. It filed for Chapter 11 on May 1, 2009. Its case number is 09-11516.

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