CRIIMI MAE Completes Reorganization and Emerges from Bankruptcy

Apr 17, 2001, 01:00 ET from CRIIMI MAE Inc.

    ROCKVILLE, Md., April 17 /PRNewswire/ -- CRIIMI MAE Inc. (NYSE:   CMM) and
 two affiliates announced that they have completed the necessary steps for
 their confirmed joint plan of reorganization to become effective and today
 emerged from bankruptcy.  This marks the conclusion of the Company's financial
 reorganization.
     "We are pleased to announce the successful reorganization of CRIIMI MAE
 and its emergence from Chapter 11," said chairman William B. Dockser.  "We
 appreciate the efforts of our advisors and the cooperation of our creditors
 and shareholders.  The employees of CRIIMI MAE deserve the credit for
 persevering and completing this complex reorganization."
     Executive vice president, David B. Iannarone, said, "The hallmark of the
 reorganization is the retention of our core assets and the continuing service
 of nearly 140 dedicated employees, 100 of whom are in our mortgage-servicing
 subsidiary.  These assets and employees create the necessary base from which
 CRIIMI MAE can address the challenges ahead, including managing the effects of
 a slowing economy.  More important, the Company's assets and employees provide
 the platform for expanding the Company's presence in the commercial mortgage
 market."
     Today, the Company's mortgage-servicing affiliate oversees a portfolio of
 over $20 billion of commercial mortgages.  The special servicing team, which
 is the group assigned to resolve defaulted loans, has an "above average"
 rating from Fitch IBCA.
     Under the terms of CRIIMI MAE's reorganization plan, the Company's Board
 of Directors has expanded effective today from six to nine directors, with
 five previously announced new directors joining the Board.   Mr. Dockser said,
 "The new Board members provide experience in relevant fields such as
 commercial real estate, financial restructuring, Real Estate Investment Trust
 operations, and information technology."
     The five new Directors are:
 
      *  John R. Cooper, senior vice president, finance, of PG&E National
         Energy Group, Inc. and chief financial officer of PG&E National Energy
         Group Company, a subsidiary of the National Energy Group, Bethesda,
         MD, that markets energy services and products across North America.
 
      *  Alan M. Jacobs, president, AMJ Advisors LLC, Woodmere, NY, that
         provides expertise in business turnarounds, corporate restructuring
         and reorganization corporate finance and dispute resolution ; AMJ was
         a financial advisor for CRIIMI MAE's Official Committee of Equity
         Shareholders.
 
      *  Donald J. MacKinnon, chief executive officer and president, REALM, New
         York, NY, a business-to-business e-commerce hub that combines the
         resources of several real estate software companies: ARGUS Financial
         Software, B.J. Murray, CTI Limited, DYNA and NewStar solutions.
 
      *  Donald C. Wood, president and chief operating officer, Federal Realty
         Investment Trust, Bethesda, MD, an owner, manager and developer of
         high quality retail and mixed-use properties.
 
      *  Michael F. Wurst, principal, Meridian Realty Advisors, Inc., Dallas,
         TX, a Dallas-based real estate investment firm focusing on out-of-
         favor or liquidity-challenged  sectors and assets.
 
     Directors to remain on the Board are:
 
      *  William B. Dockser, chairman, CRIIMI MAE Inc., Rockville, MD.
 
      *  H. William Willoughby, president, CRIIMI MAE Inc., Rockville, MD.
 
      *  Robert J. Merrick, chief credit officer and director, MCG Capital
         Corporation, Richmond, VA.
 
      *  Robert E. Woods, managing director and head of loan syndication for
         the Americas, Societe Generale, New York, NY.
 
     Garrett G. Carlson, Sr. and G. Richard Dunnells resign as directors today
 in conjunction with the effective date of the reorganization plan.
     CRIIMI MAE and its two affiliates paid in full all of their allowed claims
 using the proceeds from certain asset sales, financing from an affiliate of
 Merrill Lynch Mortgage Capital Inc. and German American Capital Corporation,
 and the issuance of two new series of senior secured notes.  The
 recapitalization financing provides for substantially all cash flows relating
 to existing assets to be used to satisfy principal, interest and fee
 obligations under the new debt.  On the effective date, CRIIMI MAE's assets
 include more than $1.3 billion of subordinated commercial mortgage-backed
 securities (CMBS), other mortgage-backed securities and equity investments in
 mortgage funds, a trading portfolio of CMBS and residential mortgage-backed
 securities and approximately $42 million of restricted and unrestricted cash.
 For a more detailed description of the new debt, including without limitation,
 payment terms, restrictive covenants and collateral, please see the Company's
 Annual Report on Form 10-K for the year ended December 31, 2000 filed with the
 Securities Exchange Commission (the "SEC") on April 16, 2001, the contents of
 which are incorporated herein.
     CRIIMI MAE's litigation with First Union National Bank has not been
 resolved and, as such, the classification of First Union's claim as secured or
 unsecured under CRIIMI MAE's reorganization plan has not yet been determined.
 In order to provide for payment of First Union's claim, if it is determined to
 be unsecured, the Company has escrowed cash, new 11.75% Series A Senior
 Secured Notes due 2006, and new 20% Series B Senior Secured Notes due 2007 in
 the amounts required by the reorganization plan for delivery to First Union,
 if the Bankruptcy Court determines that First Union's claim is completely
 unsecured (the "First Union Escrow").  If and to the extent that the
 Bankruptcy Court determines that First Union's claim is secured, then,
 pursuant to the Indentures governing the new Notes, a portion of the new
 Series B Notes will be mandatorily exchanged for cash and new Series A Notes
 held in the First Union Escrow.  For a more detailed description of the First
 Union litigation and mechanics of the mandatory exchange if First Union's
 claim is determined to be secured, please see (i) the Company's Annual Report
 on Form 10-K for the year ended December 31, 2000, (ii) Amendment No. 2 to
 Form T-3 relating to the Company's Series A Notes filed with the SEC on Form
 T-3 on April 13, 2001, and (iii) Amendment No. 2 to Form T-3 relating to the
 Company's Series B Notes filed with the SEC on Form T-3 on April 13, 2001, the
 contents of which are incorporated herein.
 
     Note: Except for historical information, forward-looking statements
 contained in this release involve a variety of risks and uncertainties. These
 risks and uncertainties include the condition of the capital markets; the
 trends in the CMBS market; competitive pressures; the effect of future losses
 on the Company's need for liquidity; the actions of CRIIMI MAE's creditors;
 the possibility that the Company's trader election may be challenged on the
 grounds that the Company is not in fact a trader in securities or that it is
 only a trader with respect to certain securities and that the Company will,
 therefore, not be able to mark-to-market its securities, or that it will be
 limited in its ability to recognize certain losses, resulting in an increase
 in shareholder distribution requirements with the possibility that the Company
 may not be able to make such distributions or maintain REIT status; the
 likelihood that mark-to-market losses will increase and decrease due to
 changes in the fair market value of the Company's trading assets; the
 possibility that the Series F and Series G Dividend Preferred Stock will not
 eliminate any or all of the Company's 1998 and 1999 tax liability or satisfy
 its REIT distribution requirements; the ability of the Company to obtain
 capital which could be affected by, among other matters, the cost and
 availability of such capital, general economic conditions, restrictive
 covenants under the Company's credit arrangements, results of operations,
 leverage, financial conditions and business prospects; and the outcome of
 litigation to which the Company is a party, as well as the risks and
 uncertainties that are set forth in the Company's disclosure statement, and
 from time to time in the Company's SEC  reports, including its Annual Report
 on Form 10-K for the year ended December 31, 2000.
 
     More information on CRIIMI MAE is available on its web site --
 http://www.criimimaeinc.com .
 
     CONTACT: Investors: Susan Railey of CRIIMI MAE Inc., 301-468-3120, or
 Media: Jim Pastore, 202-546-6451, for CRIIMI MAE Inc.
 
 

SOURCE CRIIMI MAE Inc.
    ROCKVILLE, Md., April 17 /PRNewswire/ -- CRIIMI MAE Inc. (NYSE:   CMM) and
 two affiliates announced that they have completed the necessary steps for
 their confirmed joint plan of reorganization to become effective and today
 emerged from bankruptcy.  This marks the conclusion of the Company's financial
 reorganization.
     "We are pleased to announce the successful reorganization of CRIIMI MAE
 and its emergence from Chapter 11," said chairman William B. Dockser.  "We
 appreciate the efforts of our advisors and the cooperation of our creditors
 and shareholders.  The employees of CRIIMI MAE deserve the credit for
 persevering and completing this complex reorganization."
     Executive vice president, David B. Iannarone, said, "The hallmark of the
 reorganization is the retention of our core assets and the continuing service
 of nearly 140 dedicated employees, 100 of whom are in our mortgage-servicing
 subsidiary.  These assets and employees create the necessary base from which
 CRIIMI MAE can address the challenges ahead, including managing the effects of
 a slowing economy.  More important, the Company's assets and employees provide
 the platform for expanding the Company's presence in the commercial mortgage
 market."
     Today, the Company's mortgage-servicing affiliate oversees a portfolio of
 over $20 billion of commercial mortgages.  The special servicing team, which
 is the group assigned to resolve defaulted loans, has an "above average"
 rating from Fitch IBCA.
     Under the terms of CRIIMI MAE's reorganization plan, the Company's Board
 of Directors has expanded effective today from six to nine directors, with
 five previously announced new directors joining the Board.   Mr. Dockser said,
 "The new Board members provide experience in relevant fields such as
 commercial real estate, financial restructuring, Real Estate Investment Trust
 operations, and information technology."
     The five new Directors are:
 
      *  John R. Cooper, senior vice president, finance, of PG&E National
         Energy Group, Inc. and chief financial officer of PG&E National Energy
         Group Company, a subsidiary of the National Energy Group, Bethesda,
         MD, that markets energy services and products across North America.
 
      *  Alan M. Jacobs, president, AMJ Advisors LLC, Woodmere, NY, that
         provides expertise in business turnarounds, corporate restructuring
         and reorganization corporate finance and dispute resolution ; AMJ was
         a financial advisor for CRIIMI MAE's Official Committee of Equity
         Shareholders.
 
      *  Donald J. MacKinnon, chief executive officer and president, REALM, New
         York, NY, a business-to-business e-commerce hub that combines the
         resources of several real estate software companies: ARGUS Financial
         Software, B.J. Murray, CTI Limited, DYNA and NewStar solutions.
 
      *  Donald C. Wood, president and chief operating officer, Federal Realty
         Investment Trust, Bethesda, MD, an owner, manager and developer of
         high quality retail and mixed-use properties.
 
      *  Michael F. Wurst, principal, Meridian Realty Advisors, Inc., Dallas,
         TX, a Dallas-based real estate investment firm focusing on out-of-
         favor or liquidity-challenged  sectors and assets.
 
     Directors to remain on the Board are:
 
      *  William B. Dockser, chairman, CRIIMI MAE Inc., Rockville, MD.
 
      *  H. William Willoughby, president, CRIIMI MAE Inc., Rockville, MD.
 
      *  Robert J. Merrick, chief credit officer and director, MCG Capital
         Corporation, Richmond, VA.
 
      *  Robert E. Woods, managing director and head of loan syndication for
         the Americas, Societe Generale, New York, NY.
 
     Garrett G. Carlson, Sr. and G. Richard Dunnells resign as directors today
 in conjunction with the effective date of the reorganization plan.
     CRIIMI MAE and its two affiliates paid in full all of their allowed claims
 using the proceeds from certain asset sales, financing from an affiliate of
 Merrill Lynch Mortgage Capital Inc. and German American Capital Corporation,
 and the issuance of two new series of senior secured notes.  The
 recapitalization financing provides for substantially all cash flows relating
 to existing assets to be used to satisfy principal, interest and fee
 obligations under the new debt.  On the effective date, CRIIMI MAE's assets
 include more than $1.3 billion of subordinated commercial mortgage-backed
 securities (CMBS), other mortgage-backed securities and equity investments in
 mortgage funds, a trading portfolio of CMBS and residential mortgage-backed
 securities and approximately $42 million of restricted and unrestricted cash.
 For a more detailed description of the new debt, including without limitation,
 payment terms, restrictive covenants and collateral, please see the Company's
 Annual Report on Form 10-K for the year ended December 31, 2000 filed with the
 Securities Exchange Commission (the "SEC") on April 16, 2001, the contents of
 which are incorporated herein.
     CRIIMI MAE's litigation with First Union National Bank has not been
 resolved and, as such, the classification of First Union's claim as secured or
 unsecured under CRIIMI MAE's reorganization plan has not yet been determined.
 In order to provide for payment of First Union's claim, if it is determined to
 be unsecured, the Company has escrowed cash, new 11.75% Series A Senior
 Secured Notes due 2006, and new 20% Series B Senior Secured Notes due 2007 in
 the amounts required by the reorganization plan for delivery to First Union,
 if the Bankruptcy Court determines that First Union's claim is completely
 unsecured (the "First Union Escrow").  If and to the extent that the
 Bankruptcy Court determines that First Union's claim is secured, then,
 pursuant to the Indentures governing the new Notes, a portion of the new
 Series B Notes will be mandatorily exchanged for cash and new Series A Notes
 held in the First Union Escrow.  For a more detailed description of the First
 Union litigation and mechanics of the mandatory exchange if First Union's
 claim is determined to be secured, please see (i) the Company's Annual Report
 on Form 10-K for the year ended December 31, 2000, (ii) Amendment No. 2 to
 Form T-3 relating to the Company's Series A Notes filed with the SEC on Form
 T-3 on April 13, 2001, and (iii) Amendment No. 2 to Form T-3 relating to the
 Company's Series B Notes filed with the SEC on Form T-3 on April 13, 2001, the
 contents of which are incorporated herein.
 
     Note: Except for historical information, forward-looking statements
 contained in this release involve a variety of risks and uncertainties. These
 risks and uncertainties include the condition of the capital markets; the
 trends in the CMBS market; competitive pressures; the effect of future losses
 on the Company's need for liquidity; the actions of CRIIMI MAE's creditors;
 the possibility that the Company's trader election may be challenged on the
 grounds that the Company is not in fact a trader in securities or that it is
 only a trader with respect to certain securities and that the Company will,
 therefore, not be able to mark-to-market its securities, or that it will be
 limited in its ability to recognize certain losses, resulting in an increase
 in shareholder distribution requirements with the possibility that the Company
 may not be able to make such distributions or maintain REIT status; the
 likelihood that mark-to-market losses will increase and decrease due to
 changes in the fair market value of the Company's trading assets; the
 possibility that the Series F and Series G Dividend Preferred Stock will not
 eliminate any or all of the Company's 1998 and 1999 tax liability or satisfy
 its REIT distribution requirements; the ability of the Company to obtain
 capital which could be affected by, among other matters, the cost and
 availability of such capital, general economic conditions, restrictive
 covenants under the Company's credit arrangements, results of operations,
 leverage, financial conditions and business prospects; and the outcome of
 litigation to which the Company is a party, as well as the risks and
 uncertainties that are set forth in the Company's disclosure statement, and
 from time to time in the Company's SEC  reports, including its Annual Report
 on Form 10-K for the year ended December 31, 2000.
 
     More information on CRIIMI MAE is available on its web site --
 http://www.criimimaeinc.com .
 
     CONTACT: Investors: Susan Railey of CRIIMI MAE Inc., 301-468-3120, or
 Media: Jim Pastore, 202-546-6451, for CRIIMI MAE Inc.
 
 SOURCE  CRIIMI MAE Inc.