LAS VEGAS, NV -- Operations Continue; Thomas J. Allison Named Chief Executive Officer; Company in Discussions for Debtor-in-Possession (DIP) Financing USA Commercial Mortgage Company announced today that it and certain of its affiliates have filed voluntary petitions for reorganization under Chapter 11 of the U.S. bankruptcy Code in order to address liquidity needs and debt restructuring. The company filed its petition today with the U. S. bankruptcy Court for the Southern District of Nevada. The company also does business under the name USA Capital.
In connection with the company's Chapter 11 filings, USA Commercial Mortgage said it is in active discussions with leading financial institutions to provide debtor-in-possession (DIP) financing. USA Commercial Mortgage Company is seeking a $100 million credit facility to fund operations and provide capacity to fund new loans.
Filings for Chapter 11 reorganization have been made for the following entities: USA Commercial Mortgage Company; USA Capital Realty Advisors, LLC; USA Securities, LLC; USA Capital First Trust Deed Fund, LLC; and, USA Capital Diversified Trust Deed Fund, LLC.
Thomas J. Allison Named Chief Executive Officer
The company said it has retained Mesirow Financial Interim Management (MFIM), one of the nation's top restructuring consulting firms, to assist in reorganizing operations and securing DIP financing in order to rebuild the company's core loan origination, underwriting and servicing operations. Thomas J. Allison, Mesirow executive vice president and senior managing director, has been named chief executive officer for USA Commercial Mortgage and its affiliates associated with the Chapter 11 petition.
Allison is considered one of the foremost professionals in the restructuring and turnaround field, and has been managing complex turnaround situations since 1979. Allison replaces Joseph D. Milanowski who had been president, chief operating officer and a director of USA Commercial Mortgage Company since 1998, and had been associated with the company since 1993.
Statement from New CEO Allison
Allison said: "We are entering into this process with a solid plan. We are working on liquidity to fund our commitments and to improve our collection process. What we need is time to get our investor accounts and loans back in order and to put the systems and processes in place to enable the company to operate properly on a going-forward basis. If all goes well, we hope to be able to pay creditors in full and to pay investors in accordance with their contracts."
Company Files First-Day Motions
USA Commercial Mortgage Company has filed "first-day motions" in the bankruptcy Court intended to ensure that the company's business continues to function with minimal disruption. The court filings are intended to ensure the company is able to pay its employee wages and benefits, suppliers, investors and borrowers; obtain interim financing; maintain cash management programs; and, retain legal, financial and other professionals to support the company's reorganization plans. The company has retained Ray Quinney & Nebeker of Salt Lake City, Utah and Schwartzer & McPherson of Las Vegas as its legal counsel for these filings.
Information Available on New Website
The company has published a new website -- www.usacapitalcorp.com -- to provide a single source of information about the company, the filings, and the progress of its reorganization. Information is available for investors, borrowers and media on the new website which replaces the company's previous websites.
Securities and Exchange Commission Investigation
One of the filing entities, USA Capital First Trust Deed Fund, LLC, has disclosed in prior reports filed with the SEC that the SEC is currently conducting an investigation of the operations of USA Capital First Trust Deed Fund, LLC, its manager, USA Securities, LLC, USA Commercial Mortgage Company, and USA Capital Diversified Trust Deed Fund, LLC. The SEC is investigating possible violations of federal securities laws by these entities. USA Securities, USA Commercial Mortgage Company and their affiliates are cooperating fully in the investigation. The company said that Allison, as the new CEO of the company, is conducting his own investigation of the concerns raised by the SEC.
USA Commercial Mortgage Company
USA Commercial Mortgage Company (dba USA Capital), a privately-held company, is one of the nation's leading real estate lenders. Since 1989, USA Commercial Mortgage Company has provided more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide.
The company is licensed by the State of Nevada Mortgage Lending Division (NV MBR #333) and has its headquarters at 4484 South Pecos Road, Las Vegas, Nevada, 89121.
Source: USA Commercial Mortgage Company
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CONTACT: Mark L. Olson of USA Commercial Mortgage Co., +1-702-734-2400,
or cell, +1-702-353-6540, molson@usacapitalcorp.com; or Lynn Purdue of Purdue
Marion & Associates, +1-702-222-2362, or cell, +1-702-241-5809,
lynn@purduemarion.com, for USA Commercial Mortgage Company
Web site: http://www.usacapitalcorp.com/
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