HomeBanc Mortgage files liquidating plan based on wind-down agreement

By Caroline Salls

Pittsburgh, May 1 - HomeBanc Mortgage Corp. filed a liquidating Chapter 11 plan and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

According to the disclosure statement, the plan is based on a wind-down agreement.

Under the agreement, the company's pre-bankruptcy lenders and collateral purchasers will receive a $4.85 million repayment, a trust will be created for general unsecured creditors to distribute the proceeds of the company's deferred compensation plan, the pre-bankruptcy lenders and collateral buyers will have a $1.5 million claim to reimburse them for the use of the collateral to fund the general unsecured creditor trust and the proceeds from wind-down litigation claims will be allocated among the pre-bankruptcy lenders and collateral purchasers and the unsecured creditors.

Treatment of creditors under the plan will include:

• The pre-bankruptcy lender adequate protection claim will be paid in full. If the payoff has not occurred by the plan effective date and other conditions have not been met, the liquidating agent will deposit $1.5 million in cash into an escrow account for distribution to the lenders;

• The pre-bankruptcy agent's adequate protection claim will be paid in full through distributions of the agent wind-down property;

• Holders of administrative expense claims, $2.63 million in priority tax claims and $1.38 million in priority claims will recover 100% in cash;

• Holders of $69.6 million in pre-bankruptcy agent claims will recover 100% under a wind-down stipulation;

• Holders of $223.5 million in unsecured claims will recover between 1% and 10% through their share of unsecured claim wind-down property, a general unsecured claim trust and any other cash distributions from estate assets; and

• Holders of equity interests will receive no distribution under the plan. HomeBanc said one share of the reorganized company's common stock will be issued to the liquidating agent on the plan effective date.

HomeBanc, an Atlanta-based mortgage banking business, filed for bankruptcy on Aug. 9, 2007. Its Chapter 11 case number is 07-11079.

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