Luminent Mortgage Capital out of bankruptcy after plan takes effect

By Caroline Salls

Pittsburgh, July 14 - Luminent Mortgage Capital Inc. emerged from Chapter 11 bankruptcy when its plan of reorganization took effect on Tuesday, according to a filing with the U.S. Bankruptcy Court for the District of Maryland.

As previously reported, the plan was confirmed on June 30.

Plan creditor treatment will include:

• Holders of administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Holders of Arco secured claims will receive 46% of the equity in the reorganized company;

• Holders of other secured claims will be paid in full;

• Holders of general unsecured claims will receive distributions from a general unsecured distribution fund, a share of a subsequent unsecured distribution amount and 29% of the equity in the reorganized company;

• Holders of general unsecured opt-out claims, convenience opt-out claims, TRUPs opt-out claims and interests in the company will receive no distribution;

• Holders of convenience claims will receive a share of a convenience class fund; and

• Holders of subordinated TRUPs claims will receive distributions from a general unsecured distribution fund, a share of a subsequent unsecured distribution amount and 29% of the equity in the reorganized company, provided, however, that the distributions to these creditors will be paid directly to the senior indenture trustee for further distribution to the holders of senior note claims to the extent necessary to comply with the contractual subordination provisions in the subordinated TRUPS indenture or senior notes indenture.

A share of 5% of the reorganized equity units will be distributed directly to the subordinated TRUPs trustees for distribution to holders of the subordinated TRUPS. This 5% is not subject to contractual subordination.

Luminent, a San Francisco-based real estate investment trust that invests in mortgage-backed securities and loans, filed for bankruptcy on Sept. 5, 2008. Its Chapter 11 case number is 08-21389.

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