Criimi Mae Inc.'s attempt to emerge from Chapter 11 bankruptcy protection hit another snag last week, as the judge handling the case requested that additional legal briefs be filed as a result of objections raised at a hearing.
At the hearing, in which the bankruptcy judge was to approve a disclosure statement filed by the Rockville, Md.-based commercial mortgage real estate investment trust, Salomon Smith Barney and Citicorp Real Estate Inc. filed a joint objection directly related to the disclosure statement. The briefs are due May 9.
"The judge did not schedule a hearing," said Criimi Mae spokesman James Pastore regarding the briefs. "He has already reviewed the disclosure statement ... though hearings this week were designed to rule on the adequacy of the disclosure statements. Salomon Smith Barney and Citigroup decided to file an objection, so we need to deal with that."
Assuming the judge rules on the objections in Criimi Mae's favor, the disclosure statement will be sent to the company's impaired creditors for a vote. If that gets approval, a final confirmation hearing will be held, though Pastore offered no such timeline. "Unless we take this a step at a time, we could get ahead oaf ourselves," he said.
Criimi Mae also filed a third amended plan of reorganization with the bankruptcy court April 25, which has been rumored to be just "fine tuning" of the second amended plan.
As part of its reorganization plan, Criimi Mae closed a sale on seven classes of commercial mortgage-backed securities rated double-B to triple-C and unrated last Friday from First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust, Series 1998-C2.
The CMBS, totaling $140 million, were sold to Lehman ALI Inc. Approximately $113 million of those proceeds will be used to pay debt owed on the CMBS to Lehman and First Union National Bank. The remaining $27 million will be used as capital for the reorganization plan.