Ownit Mortgage files liquidation plan

By Caroline Salls

Pittsburgh, July 26 - Ownit Mortgage Solutions, Inc. filed a plan of liquidation and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the Central District of California.

According to the disclosure statement, the plan establishes a liquidating trust, which will distribute the company's remaining assets and proceeds from causes of action to creditors.

After all claims and post-effective date expenses are paid in full, including interest, any remaining assets and proceeds will be transferred to an equity pour-over account to benefit interest holders.

Plan creditor treatment will include:

• Holders of $1.5 million in administrative claims, $4.1 million in priority non-tax claims and $8,000 in priority tax claims will recover 100% in cash;

• Holders of $116.3 million in general unsecured claims will receive their share of liquidating trust assets. These creditors will not receive interest on their claims unless the trust includes enough funding to pay all claims in full. Also, general unsecured creditors will not receive any cash payments until all administrative and priority claims and post-bankruptcy expenses are paid in full;

• Holders of subordinated general unsecured claims will receive a share of the liquidating trust assets, provided that all general unsecured claims are paid in full first; and

• Interest holders will receive cash from an interest pour-over account if all other claims and post-effective date expenses are paid in full.

As previously reported, the company completed two mortgage loan sales in February and May for a total of $7.04 million.

Ownit, an Agoura Hills, Calif., mortgage lender, filed for bankruptcy on Dec. 28, 2006. Its Chapter 11 case number is 06-12579.

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