ResMAE granted court approval for plan of reorganization

By Jennifer Lanning Drey

Portland, Ore., June 5 - ResMAE Mortgage Corp. was granted court approval for its plan of reorganization Tuesday from the U.S. Bankruptcy Court for the District of Delaware, according to an attorney.

The company expects to emerge from bankruptcy on or about June 15, according to a company news release.

As previously reported, the plan is sponsored by RMC Mortgages Holdings LLC, which was the successful bidder for the sale of substantially all of ResMAE's assets. Under the sale agreement, ResMAE will issue 100% of the new equity in the reorganized company to the plan sponsor in exchange for RMC's agreement to support and facilitate the company operations pending plan confirmation.

Plan distributions will be funded with the balance of the purchase price for the assets, proceeds from the liquidation of assets that were not part of the sale and proceeds from causes of action.

"Today's decision represents a critical step for us as we move our business forward with renewed energy and excitement about the prospects of ResMAE and this important industry," said Jack Mayesh, chairman of ResMAE, in the release.

Creditor treatment

Treatment of creditors under the plan will include:

• Holders of other priority claims will recover 100% in cash;

• Holders of secured claims will recover 100% in either cash with interest or in the return of the collateral securing the claim;

• Holders of general unsecured claims will receive their share of trust beneficial interests for an unknown recovery amount;

• Holders of convenience claims, which are general unsecured claims of $50,000 or less, will receive a 12% cash recovery for a maximum of $6,000. Holders of general unsecured claims can elect to have their claims reduced and treated as convenience claims; and

• Holders of subordinated claims and old equity interests will receive no distribution under the plan.

ResMAE, a mortgage lender based in Brea, Calif., filed for bankruptcy on Jan. 12. Its Chapter 11 case number is 07-10177.

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