Court affirms Luminent's compliance with DIP loan terms; Arco files appeal

By Jennifer Lanning Drey

Portland, Ore., Oct. 22 - Luminent Mortgage Capital, Inc. did not default under the terms of the company's debtor-in-possession loan agreement with Arco Capital Corp., Ltd., according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Maryland.

As previously reported, Luminent filed a motion asking the court to affirm its compliance with the terms of the DIP loan after Arco said Luminent violated the agreement on Sept. 29 with a request to borrow $200,000 under the loan.

Arco claimed that Luminent breached the loan agreement by misrepresenting that it had used all available cash on hand and cash collateral before making the request. Arco said Luminent had about $200,000 when it made the request.

The lender had asked the court for a judgment confirming that the company breached the agreement and for at least $200,000 in damages.

Arco appealed the decision Oct. 22.

Luminent, a San Francisco-based real estate investment trust that invests in mortgage-backed securities and loans, filed for bankruptcy on Sept. 5. Its Chapter 11 case number is 08-21389.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.