Mortgage Lenders Network USA plan of liquidation takes effect

By Jennifer Lanning Drey

Portland, Ore., June 12 - Mortgage Lenders Network USA, Inc.'s plan of liquidation took effect June 10, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the plan was confirmed on Feb. 3.

Treatment of creditors under the plan includes:

• Holders of $100,000 in administrative claims and $3.8 million in priority claims will recover 100% in cash;

• Holders of $300,000 in priority tax claims will recover 100% in funds from the company's tax account;

• Holders of other secured claims will receive either the proceeds from the sale of the collateral securing the claim or the return of the collateral;

• Holders of $100 million in unsecured claims will recover 1% to 5% through a share of net plan proceeds, including available cash and any additional liquidation or litigation proceeds. These creditors will not receive a distribution until cash is first reserved for potential payment of disputed claims; and

• Holders of equity interests will receive no distribution under the plan.

Mortgage Lenders Network, a Middletown, Conn.-based lending company, filed for bankruptcy on Feb. 5, 2007. Its Chapter 11 case number is 07-10146.

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