Metropolitan Files for Bankruptcy
Metropolitan Mortgage & Securities was expected to file a petition for Chapter 11 bankruptcy protection during the week of Feb. 2, and news reports as MSN went to press indicated that the firm has indeed filed for bankruptcy protection.
The troubled company issued a statement on Jan. 30 that it expected to file the petition during the next week.
The filing would include a sister firm, Summit Securities Inc. It would allow the two to combine operations and reorganize through a "debt for equity plan."
Under the plan, the company's creditors would end up with all of the ownership of the new entity.
Bill Smith, chief financial officer of Metropolitan, said, "The companies look forward to working with their bondholders and creditors to emerge from bankruptcy under a debt-for-equity plan as soon as possible.
"Based on our recent discussions, we believe the creditors are supportive of our efforts to use the bankruptcy process to implement a consensual plan and take all necessary actions to protect and preserve the value of the companies' operations and assets."
A trio of law firms representing bondholders has already been in contact: Randall & Danskin PS and Southwell & O'Rourke PS, both of Spokane, Wash., and King & Spalding LLP, Atlanta and New York.
Copyright 2004 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.mortgageservicingnews.com