TransLand Financial obtains court OK to make disbursements on loan closings, construction draw

By Reshmi Basu

New York, Aug. 28 - A U.S. federal judge Tuesday approved TransLand Financial Service, Inc.'s emergency motion to make scheduled payments on new loan closings and construction draws, according to a person familiar with the case.

Under an earlier court ruling, judge Arthur B. Briskman said that the company could not make disbursements without approval from a U.S. Trustee, not yet appointed.

However, the company said it needed to make an immediate $835,976 payment for loan closings and a $182,476 payment for construction draws, since both were due Tuesday.

"Without the imposition of emergency relief, the putative debtor will be exposed to potential liability and potentially lose future business relationships," TransLand argued in the motion.

The company will be permitted to make the disbursement with money drawn from its warehouse lines of credit from Washington Mutual, UBS Real Estate Securities, Mercantile Bank or from another third-party lender that can conduct business in Florida, the judge ruled.

TierOne Bank, Federal Trust Bank and MidCountry Bank filed an involuntary Chapter 11 bankruptcy case against TransLand on Aug. 23 in the U.S. Bankruptcy Court for the Middle District of Florida.

The company is a Maitland, Fla.-based mortgage brokerage firm. Its Chapter 11 case number is 07-03834.

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