As part of its reorganization plan to emerge from Chapter 11 bankruptcy protection, Criimi Mae Inc. sold five classes of commercial mortgage-backed securities. The transaction marks the final asset sale required to complete its reorganization.
The sale totaled $43.8 million in BB, B-minus and unrated subordinate securities from Chase Commercial Mortgage Securities Corp., Series 1998-1. The bonds were sold to German American Capital Corp. (GACC), a unit of Deutsche Bank.
Of the sales proceeds, $36.6 million was used to pay down secured financing owed to GACC, and the remaining $7.2 million will be used to fund the reorganization itself. The total amount of aggregate gross sales proceeds from its CMBS sales is approximately $230 million.
Criimi Mae's plan is supported by the unsecured creditors committee, the equity shareholders committee, and it includes significant financing by the company's two biggest secured creditors, Merrill Lynch & Co. and GACC, according to a Criimi Mae spokesman.
Criimi Mae has now cleared a majority of the hurdles it faced to emerge from almost two years in Chapter 11 protection. The bankruptcy court judge is expected to clear the way for the company to mail out ballots for approval of the reorganization in the near future.