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BANKRUPTCY COURT APPROVES ADEQUACY OF LOMAS FINANCIAL CORPORATION'S REVISED DISCLOSURE STATEMENT AND PLAN OF REORGANIZATION

BANKRUPTCY COURT APPROVES ADEQUACY OF LOMAS FINANCIAL CORPORATION'S
 REVISED DISCLOSURE STATEMENT AND PLAN OF REORGANIZATION
 DALLAS, Nov. 7 /PRNewswire/ -- Lomas Financial Corporation (NYSE: LFC) announced today that the United States Bankruptcy Court for the Southern District of New York had approved the adequacy of its first amended disclosure statement and that it expected to solicit acceptances of its Plan of Reorganization in the near future. It is expected that the confirmation hearing will be held on Dec. 30, 1991. The amended disclosure statement contains a second amended Plan of Reorganization. The first amended plan was filed on Sept. 12, 1991.
 Jess Hay, chairman of the board and chief executive officer, said that the revised plan reflects the conclusion of negotiations with the creditors and equity committees. Hay said the revised plan reflects substantial agreement with the creditors' committee and he expects that both the creditors and equity committees will support the amended plan.
 Hay said that he believes that the plan provides a fair and equitable settlement of the claims and interests of all classes of creditors and equity holders, while ensuring that the company has the necessary resources to succeed in the future.
 "We believe that this plan is in the best interest of all of the company's constituents," he said.
 As with the original plan, the amended plan provides for spinning off 81 percent of the equity in the current real estate activities of Lomas to existing equity holders. Lomas Realty USA (LRUSA) will operate independently of Lomas, with only 19 percent of the LRUSA equity being owned by Lomas.
 Lomas' plan provides for distribution of the following in settlement of all claims and in exchange for all outstanding equity securities:
 (a) after settlement of administrative expenses and priority claims, $360 million in cash to creditors;
 (b) $140 million principal amount of convertible notes due 2003 of Lomas, bearing interest at 9 percent and convertible into approximately 5.43 million shares of common stock of Lomas (convertible notes);
 (c) $240 million principal amount of floating rate secured notes of STL, Inc., a wholly owned subsidiary of Lomas, which will be secured by assets of such subsidiary with a book value, after reserves, of at least $360 million;
 (d) $330 million principal amount notes due 1999 (LMUSA notes) of Lomas Mortgage USA, Inc. (LMUSA), a wholly owned subsidiary of Lomas, bearing interest at a rate which increases over time from 10-1/2 percent to 12-1/2 percent. The notes are not redeemable for six months after issue, but are callable at par during the second six months, at 103 percent of par during the second year, at 107 percent during the third year, and thereafter at premiums declining ratably to par in year seven;
 (e) $130 million principal amount of secured senior notes of Lomas Realty USA, Inc., bearing interest at 13.75 percent per annum. LRUSA may at its option pay interest in cash or in the form of additional senior secured notes;
 (f) 20,000,000 shares of common stock of Lomas;
 (g) 81 percent of the shares of common stock of LRUSA; and
 (h) warrants to purchase 7.0 million shares of reorganized Lomas common stock, expiring Oct. 31, 2001.
 According to the plan, the above consideration will be allocated among the various classes approximately as follows:
 Senior Debt: $340.7 million cash, $70.2 million of convertible notes, $238.5 million of the STL, Inc. secured notes, $322.4 million of the LMUSA notes, $129.2 million of the LRUSA notes, and 52.9 percent of the Lomas common equity.
 General Unsecured: $2.1 million in cash, $.9 million of convertible notes, $1.5 million of STL, Inc. secured notes, $2.0 million of LMUSA notes, $.8 million of LRUSA notes and .6 percent of Lomas common equity.
 Subordinated Debt: The holders of convertible subordinated debentures, as a class, will receive $13.1 million in cash, $52.3 million convertible notes, $4.2 million of LMUSA notes and 20.3 percent of Lomas common equity; and the holders of subordinated notes as a class will receive $4.1 million cash, $16.6 million of convertible notes, $1.4 million of LMUSA notes and 23.1 percent of Lomas common equity.
 Preferred Stock: the preferred stock, as a class, will receive approximately 1.65 percent of Lomas common equity, 32.2 percent of the common equity of LRUSA and 10-year warrants to purchase 2,589,970 shares of Lomas common stock.
 Common Equity: common equity and common equivalents will receive approximately 1.35 percent of Lomas common equity and 48.8 percent of the LRUSA common equity and 10-year warrants to purchase 4,410,030 shares of Lomas common stock.
 -0- 11/7/91
 /CONTACT: Tricia Zimmerman of Lomas Financial, 214-879-5542, or Michael Sitrick or Steve Stern, 310-788-2850, for Lomas Financial/
 (LFC) CO: Lomas Financial Corporation ST: Texas IN: FIN SU: FC -- NY014 -- 2073 11/07/91 09:24 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Nov 7, 1991
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