USA Commercial Mortgage obtains court OK to resume fund distribution to investors

By Jennifer Lanning Drey

Eugene, Ore., Aug. 4 - USA Commercial Mortgage Co. obtained court approval to distribute funds held in its collection account to direct lenders and authorizing USA Capital Diversified Trust Deed Fund, LLC to distribute funds to its members, according to an attorney.

The ruling came Friday from the U.S. Bankruptcy Court for the District of Nevada.

As previously reported, USA Commercial Mortgage said it had about $93 million in its collection account as of June 30, including about $14 million in interest collected post-bankruptcy on nonperforming loans and about $60 million collected in loan principal repayments.

The company had about $9 million in its loan servicing collection account as of April 12, and it suspended payments to all 3,600 direct lenders and 3,200 fund members on April 13 when the company filed for Chapter 11 bankruptcy.

The company previously said it would begin mailing checks as soon as it received court approval.

USA Commercial Mortgage, a privately held real estate lender based in Las Vegas, filed for bankruptcy on April 13 in the U.S. Bankruptcy Court for the District of Nevada. Its Chapter 11 case number is 06-10725.

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