NYC Lender is High Bidder for USACM Assets

LAS VEGAS-Compass Partners LLC, a New York City-based private equity firm submitted the highest and best bid for certain assets of locally based USA Commercial Mortgage Co. in U.S. Bankruptcy Court in Las Vegas. Compass bid $67 million for the rights to service USACM loans including substantially all of the assets of USA Capital First Trust Deed Fund LLC. Compass' winning bid is subject to confirmation of the Joint Reorganization Plan of USACM at a hearing on December 19th.

Compass Partners acquires distressed commercial mortgages throughout the country and also services them for third parties. A breakdown of Compass' final $67-million bid wasn't immediately available. Compass' original bid of $57.5 million included $48 million for the fund, $8 million for loan servicing rights and a $1.5 million break-up fee to initial bidder Silver Point Capital of Greenwich, CT.

Mark Olson, the chief operating officer for USACM during the restructuring tells Globest.com that the fund took in $85 million with which it made short-term loans for commercial real estate projects. Approximately 60% of the loans are non-performing, he says.

"We've been working on collecting the loans regardless of the auction," he says. "Now that we are essentially dealing with Compass money, we will be working more closely with them on how they want to proceed."

USA Commercial Mortgage Company and somem of its affiliates filed voluntary petitions for reorganization in April under Chapter 11 with the U.S. Bankruptcy Court for the Southern District of Nevada. The company also does business under the name USA Capital. Filings for Chapter 11 were made for USA Commercial Mortgage Co.; USA Capital Realty Advisors LLC; USA Securities LLC; USA Capital First Trust Deed Fund LLC; and, USA Capital Diversified Trust Deed Fund LLC.

Olson joined the board shortly before the filings and then proceeded to help interview restructuring companies. In April, an affiliate of Mesirow Financial Consulting was retained to handle the restructuring, the previous president (Joseph D. Milanowski) was terminated and Thomas J. Allison was hired as president and chief restructuring officer. Allison then tapped Olson to be COO during the restructuring. With the restructuring winding down, Olson in September accepted a position as managing director of the Las Vegas office of Commercial Capital Inc., an unrelated private lender based out of Greenwood, CO.