Mortgage company’s liquidation plan closer

By Sean F. Driscoll

BusinessRockford.com

Attorneys are inching closer to filing a liquidation plan for the bankrupt Commercial Mortgage & Finance, with new information on the company’s finances set to be released this week.

The information, called a disclosure statement, will provide the company’s financial status to Commercial Mortgage’s 1,400 creditors before they’re asked to vote to approve the plan to liquidate the company. The disclosure statement must be filed with the bankruptcy court by Friday, although attorneys for the company and the creditors say it’s nearly complete and might be submitted sooner.

If the disclosure statement is approved by Judge Manuel Barbosa at a July 1 court hearing, then creditors can start voting on whether to accept the plan, which also has yet to be filed. Proceeds from the liquidation will go toward repaying the more than $60 million owed to Commercial Mortgage’s 1,400 creditors. The average investor is owed about $50,000.

Commercial Mortgage, which traces its roots to 1929, sold promissory notes to investors on six- or nine-month terms and offered higher interest rates than traditional certificates of deposit.

Many investors bought multiple notes and continually rolled them over.

The company filed for Chapter 11 bankruptcy protection Oct. 8 because a rash of investors tried to cash out their notes. The investments were frozen and remain inaccessible to creditors.

Commercial Mortgage & Finance Co. does not own CMF Insurance Agency of Rockford.

Reach staff writer Sean F. Driscoll at 815-987-1346 or sdriscoll@rrstar.com.

Loading commenting interface...