USA Commercial granted court approval for conversion of $58.4 million debt to loan

By Jennifer Lanning Drey

Eugene, Ore., July 24 - USA Commercial Mortgage Co. obtained court approval of a $58.4 million security agreement and promissory note with USA Investment Partners, LLC, according to a Monday filing with the U.S. Bankruptcy Court for the District of Nevada.

The company said previously that it entered into the agreement to pledge USA Investment's ownership interests in some real estate projects as security for a set of receivables owed to USA Commercial Mortgage.

The agreement converts the receivables into a loan, which provides security for obligations owed by USA Investment.

The transactions do not represent a release or compromise by USA Commercial of any claims against USA Investment partners, according to the motion.

In addition, the motion said any payments, collateral or proceeds of collateral received under the promissory note or the security agreement will be held for the benefit of USA Commercial and its subsidiaries and will neither be used, allocated, nor distributed except upon further order by the court.

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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