Met Mortgage, Summit Plan Ch. 11 Filing

Metropolitan Mortgage & Securities Inc., Spokane, Wash., and Summit Securities Inc. have jointly announced plans to file for Chapter 11 bankruptcy protection.The companies said the expected filing would enable them to combine and reorganize their businesses through a debt-for-equity arrangement. They said a preliminary agreement on the terms of such a plan could be reached shortly. Metropolitan Mortgage has been embroiled in controversy in recent months. Investors in securities issued by the company have filed a class action lawsuit the company's auditor, Ernst & Young, resigned because it said it could no longer rely on the representations of management; and the Securities and Exchange Commission has started an informal inquiry. C. Paul Sandifur Jr. recently resigned as chairman, president, and chief executive of Metropolitan Mortgage and was replaced on an acting basis by Irv Marcus.