Luminent asks court to declare company in compliance with DIP agreement

By Jennifer Lanning Drey

Portland, Ore., Oct. 8 -Luminent Mortgage Capital, Inc. asked the U.S. Bankruptcy Court for the District of Maryland for a ruling stating that an event of default has not occurred under the terms of the company's debtor-in-possession loan agreement, as its DIP lender previously claimed.

In a Tuesday filing, Luminent said DIP lender Arco Capital Corp. Ltd. mistakenly asserted that the company had violated the agreement on Sept. 29 with its request to borrow $200,000 under the loan.

As previously reported, Arco told the court in a separate filing that Luminent breached the loan agreement by misrepresenting that it had used all available cash on hand and cash collateral before making the request. Arco claimed that Luminent had about $200,000 when it made the request.

Luminent said it made the request in anticipation of various expenses for which the company lacked sufficient funds.

Arco is seeking a judgment confirming that the company breached the agreement and at least $200,000 in damages.

Arco also previously asked the court to confirm that conversion of Luminent's Chapter 11 bankruptcy case to Chapter 7 for liquidation would constitute an event of default.

Luminent said Arco's claims that the company intends to convert the case to Chapter 7 are mistaken.

Luminent, a San Francisco-based real estate investment trust that invests in mortgage-backed securities and loans, filed for bankruptcy on Sept. 5. Its Chapter 11 case number is 08-21389.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.