Criimi Mae's attempt to reemerge from Chapter 11 federal bankruptcy protection has moved one step closer with the submission of a new, amended joint plan of reorganization.

The plan, along with a Disclosure Statement, was submitted to the U.S. Bankruptcy Court Dec. 23. Criimi Mae, a Rockville, Md.-based commercial mortgage real estate investment trust, has also filed a Form 8-K with the Securities and Exchange Commission using the plan and the disclosure statement as exhibits.

The amended plan would use recapitalization financing from two of Criimi Mae's largest secured creditors, Merrill Lynch Mortgage Capital Inc. and the German American Capital Corp.

The two companies would remain secured creditors and contribute an estimated $380 million toward the total $873 million recapitalization. Additional sources of capital will come from the sale of commercial mortgage-backed securities that were part of a prior reorganization plan, and from other existing debt holders.

"What's happening is the two big secured creditors are in effect going to be refinancing; the collateral will be CMBS," said a spokesman for Criimi Mae. "The value of those CMBS will change, therefore, the amount of the loan is going to change." Merrill Lynch and GACC have been in talks with the company since October 1998, when Criimi Mae first filed for bankruptcy protection.

The bankruptcy court also granted Criimi Mae's request to remove the pending bidder protection provisions motion in a stock purchase agreement that was filed along with an earlier plan in September 1999.

The amended plan replaces that $910 million plan. Under the prior plan, a division of Apollo Real Estate Advisors IV LP, would have invested $50 million to $61 million in common preferred stock, and purchased a majority of Criimi Mae's CMBS. The new plan, which places Apollo on the sidelines, is not based on equity investments.

Another plan was filed Dec. 20 by a committee of unsecured creditors of Criimi Mae, calling for liquidation of the company.

As an alternative to the reorganization plan filed by the company itself, Criimi Mae would be liquidated, and proceeds would be distributed to creditors. The company has not viewed that 200-page plan.

If both plans meet minimum conditions under section 1129 of the bankruptcy code, the bankruptcy court judge will confirm which plan Criimi Mae should follow.

However, a court date has not been set yet. What will be determined at the next hearing also has not been released. But the spokesman for Criimi Mae has hinted, "Presumably it would relate to the reorganization plan and most importantly the disclosure statement, because that is going to have to be sent out to parties at interest."

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