CRIIMI MAE Files Plan of Reorganization
ROCKVILLE, Md, Sept. 23 /PRNewswire/ -- CRIIMI MAE Inc. (NYSE: CMM) and its affiliates CRIIMI MAE Holdings II, L.P. and CRIIMI MAE Management, Inc. today filed their Joint Plan of Reorganization (the "Plan") with the United States Bankruptcy Court, District of Maryland, Greenbelt Division.
The Plan contemplates recapitalization financing of approximately $910 million consisting of $50 million (up to $61 million under certain circumstances) of a new series of convertible preferred stock to be purchased by an affiliate of Apollo Real Estate Advisors IV, L.P. ("Apollo"), approximately $435 million of debt financing, a portion of which would come from certain existing debtholders, and $425 million of additional amounts, the bulk of which would result from the sale of certain commercial mortgage-backed securities ("CMBS").
The Plan provides for full payment in cash of all allowed secured claims of four creditors. Two secured claim holders would receive partial payment in cash with the balance evidenced by a new senior secured note.
The Plan also provides for full payment of the Company's allowed unsecured claims, including the Company's 9-1/8% Senior Notes. Full payment of the allowed unsecured claims would consist of the payment of 50% of the amount of each holder's allowed unsecured claim in cash and the issuance of a new note evidencing the remaining 50% of the amount of such holder's allowed unsecured claim.
The Plan further provides that holders of Series B Preferred Stock (NYSE: CMM-PrB) would receive an identical number of shares of new Series B Preferred Stock, in exchange for their existing Series B Preferred Stock. The new Series B Preferred Stock would have identical relative rights and preferences to the existing Series B Preferred Stock except that the dividend rate would be increased by $.16 per annum to a base dividend of $2.88 per share or 11.52% and remain at such dividend rate so long as Series B Preferred Stock remains outstanding. Additionally, for a period of 20 months plus one day after the date of issuance of the new preferred stock to Apollo, the new Series B Preferred Stock would be junior with respect to dividend rights and liquidation preference to the new preferred stock issued as part of the recapitalization financing of the Plan (i.e., the new preferred stock issued to Apollo and any new preferred stock issued in connection with a potential Rights Offering). Thereafter, the new Series B Preferred Stock would rank pari passu with respect to dividend rights and liquidation preference to all new preferred stock issued as part of the recapitalization financing of the Plan.
The Plan also contemplates that holders of Common Stock would receive an identical number of shares of new Common Stock in exchange for their existing Common Stock plus Rights to purchase shares of a new series of preferred stock if the Company proceeds with a Rights Offering of up to $11 million.
The Plan further contemplates that holders of Series C and D Preferred Stock would receive $106 per share in cash, representing the redemption price contained in the respective governing documents.
"The filing of the Plan, coupled with the recently announced Apollo agreement, opens the next chapter in the reorganization of CRIIMI MAE," said Chairman William B. Dockser. "Our goal is to obtain commitments for the remaining reorganization financing called for by the Plan, solicit acceptance of the Plan from the parties entitled to vote, obtain confirmation of the Plan from the Bankruptcy Court, and emerge from Chapter 11."
The Company will file a Current Report on Form 8-K with the Securities and Exchange Commission, which will include the Plan as an exhibit. The above discussion of the Plan is qualified in its entirety by reference to the entire Plan. The Company has previously filed a Form 8-K with the SEC which includes as an exhibit the Apollo Purchase Agreement and a draft of the Articles Supplementary to the Articles of Incorporation which sets forth the rights and preferences (relating to dividends, conversion, redemption, rank, voting, etc.) of the new series of convertible preferred stock to be purchased by Apollo.
On September 20, 1999, the Bankruptcy Court entered an order extending the Company's right to file a plan of reorganization through October 16, 1999. The order also provides the Unsecured Creditors' Committee and the Equity Security Holders' Committee in the Company's Chapter 11 bankruptcy case with the right to jointly file a plan of reorganization during the same period. |
