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USA Capital Cuts $58M Deal With Debtor

LAS VEGAS-The locally based lender is reorganizing under Chapter 11 of the US Bankruptcy Code. In the process, real estate assets become security for receivables owed the company by a debtor.

By Brian K. Miller | Updated on June 17, 2006

LAS VEGAS-USA Commercial Mortgage Co. (dba USA Capital) has made progress in its two-month-old effort to reorganize under Chapter 11 of the US Bankruptcy Code. The locally based provider of short-term and permanent financing to homebuilders, commercial developers and apartment owners announced this week it reached an agreement with USA Investment Partners LLC regarding its $58.4-million obligation to USA Commercial Mortgage. The company has filed a motion seeking approval of the agreement, for which a hearing will occur on June 21.

Restructuring specialist Thomas Allison, the company’s new president and chief restructuring officer, says the security agreement and promissory note with USA Investment Partners LLC calls for USAIP to pledge ownership interests in certain real estate projects as security for a set of receivables owed USACM. The agreement converts the receivables into a loan with an interest rate, maturity date, default provisions, and provides security for obligations owed by USAIP.

Allison’s company, Mesirow Financial Interim Management, is assisting USA Commercial Mortgage in reorganizing operations and securing debtor-in-possession financing in order to rebuild the company’s core loan origination, underwriting and servicing operations. When it filed Chapter 11 in April, the company reported assets totaling $962 million.

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