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Doral Financial secures OK of $20.18 million mortgage resolution
By Mark Reccek
Bethlehem, Pa., Dec. 29 – Doral Financial Corp. and its official committee of unsecured creditors received court approval of a $20.18 million stipulation related to mortgage sale agreements and the disposition of funds in related escrow accounts, according to an order filed Monday with the U.S. Bankruptcy Court for the Southern District of New York.
The parties to the resolution include the Federal Deposit Insurance Corp., as receiver for Doral Bank, the committee and Abbey Finance Holdings LLC.
As previously reported, the resolution provides that $7.96 million will be distributed to Abbey on account of cure payments and escrow disbursements, $3.66 million will be distributed to the debtor and $8.56 million will be distributed to the receiver
According to a previous motion, Abbey deposited certain amounts into escrow accounts as the escrow agent, with the amounts to be released upon direction of the debtor, Doral Bank and Abbey, at the end of a specified period and after certain conditions were satisfied.
If the debtor fails to cure any defect within the applicable cure period, Abbey is entitled to a disbursement from the applicable escrow account established for satisfaction of such defect and such portion of the purchase price not ultimately paid to the debtor.
Also, upon resolution of all outstanding claims upon the escrow accounts, with respect to both mortgage assets of the debtor and its non-debtor affiliates, any amounts remaining in such escrow accounts will be distributed to the applicable seller, upon written instructions signed by the debtor, Doral Bank and Abbey.
Doral is a holding company based in San Juan, Puerto Rico. The company filed for bankruptcy on March 11, 2015 under Chapter 11 case number 15-10573.
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