USA Commercial Mortgage amended plan eliminates subordinated claim, equity interests distribution

By Caroline Salls

Pittsburgh, Nov. 7 - USA Commercial Mortgage Co. filed an amended plan of reorganization Monday with the U.S. Bankruptcy Court for the District of Nevada that eliminates distributions to subordinated claimants and holders of equity interests.

Previously, holders of subordinated claims were scheduled to receive a share of available cash, and holders of equity interests were to receive any cash remaining in the plan distribution fund.

Under the plan, proceeds from the company's asset sale will be deposited into a distribution account, and the expense reserves of each debtor will be deposited into their respective distribution accounts.

Unclassified claims and class 1 priority non-tax claims will be paid from the distribution accounts.

Within 30 days of the effective date, the USA Capital First Trust Deed Fund, USA Commercial Mortgage, USA Securities and USA Capital Diversified Trust Deed Fund excluded assets will be transferred to the debtor's corresponding liquidation trust.

The trust estates will be liquidated by separate estate administrators and advisory committees under the plan.

The liquidation proceeds will then be distributed to beneficiaries of the liquidation trusts.

Treatment of creditors under the plan will include:

• Holders of secured claims will receive payment in full in either cash from the distribution account or the return of the collateral securing the claim;

• Holders of priority unsecured claims will be paid in full;

• Holders of general unsecured claims, late claims, and penalty claims will receive their share of all cash available for distribution if the asset sales close, up the full amount of the claim after satisfaction in full of all liquidation expenses, secured claims, administrative expense claims, priority tax claims and priority non-tax claims; and

• Holders of subordinated claims and equity interests will receive no distribution under the plan.

USA Commercial Mortgage, a privately held real estate lender based in Las Vegas, filed for bankruptcy on April 13, 2006. Its Chapter 11 case number is 06-10725.

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