Metropolitan Mortgage disclosure statement approved

New York, Sept. 26 - Metropolitan Mortgage & Securities Co., Inc.'s disclosure statement was approved by the U.S. Bankruptcy Court for the Eastern District of Washington, according to a court filing Friday.

Votes on the plan are due by Nov. 18 and objections must be received by Nov. 28. A hearing to confirm the plan will be held on Dec. 13 and 14.

The disclosure statement approved is for Metropolitan Mortgage's third amended plan.

Metropolitan Mortgage estimates that after paying secured claims and various costs its liquidation will raise $68 million for its general unsecured creditors and $17 million for Summit Securities, Inc.'s general unsecured creditors.

Returns are estimated at 14 cents on the dollar for Metropolitan Mortgage and 15 to 18 cents on the dollar for Summit.

In addition, legal action could raise tens or even hundreds of millions of dollars extra, according to the disclosure statement. The document says the most significant is likely to be over allegations of professional malpractice against providers of audit, financial, legal and tax consulting services.

Under the plan, on the effective date, all of the assets of Metropolitan will be invested in the Metropolitan Creditors' Trust, which will own or control the remaining assets, will be responsible for the sale or liquidation of the assets and will determine and make distributions.

Treatment of creditors under the plan will include:

* Holders of $121,000 in employee claims will receive 100% recovery in cash;

* Holders of $13.4 million in secured claims may receive payment in full of their claim or proceeds from the sale of the property securing the claim or the property securing the claim; and

* Holders of $357.25 million in general unsecured claims will receive a beneficial interest in the creditors' trust;

* Holders of $157.9 million in general unsecured claims against Summit Securities will receive a beneficial interest in the creditors' trust;

* Holders of an unknown amount of subordinated debentures issued by Metropolitan Mortgage and Summit Securities will receive nothing;

* Holders of $102 million in preferred stock issued by Metropolitan Mortgage and $29 million issued by Summit Securities will receive nothing.

Spokane, Wash.-based Metropolitan filed for bankruptcy on Feb. 4, 2004. Its Chapter 11 case number is 04-00757.

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