Ownit Mortgage adjusts administrative, general unsecured claim estimates

By Caroline Salls

Pittsburgh, Sept. 10 - Ownit Mortgage Solutions, Inc. filed an amended plan of liquidation and related disclosure statement Monday with the U.S. Bankruptcy Court for the Central District of California to adjust the amount of claims expected to be allowed in each creditor class.

Specifically, under the amended plan, the estimated amount of allowed administrative claims increased to $1.7 million from $1.5 million, and the company now expects to allow $181 million in general unsecured claims, up from $116.3 million under the original plan.

As previously reported, 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 $1.7 million in administrative claims, up from $1.5 million under the original plan, $4.1 million in priority non-tax claims and $8,000 in priority tax claims will recover 100% in cash;

• Holders of $181 million in general unsecured claims, up from $116.3 million estimated under the original plan, 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.

The company expects a hearing on approval of the amended disclosure statement to be held this month, and the plan confirmation hearing is scheduled for Nov. 1.

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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