USA Commercial Mortgage Company Files Voluntary Petitions for Chapter 11 Reorganization

Operations Continue; Thomas J. Allison Named Chief Executive Officer;
Company in Discussions for Debtor-in-Possession (DIP) Financing

LAS VEGAS, April 13  -- USA Commercial Mortgage Company
announced today that it and certain of its affiliates have filed voluntary
petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code
in order to address liquidity needs and debt restructuring. The company
filed its petition today with the U. S. Bankruptcy Court for the Southern
District of Nevada. The company also does business under the name USA
Capital.
In connection with the company's Chapter 11 filings, USA Commercial
Mortgage said it is in active discussions with leading financial
institutions to provide debtor-in-possession (DIP) financing. USA
Commercial Mortgage Company is seeking a $100 million credit facility to
fund operations and provide capacity to fund new loans.
Filings for Chapter 11 reorganization have been made for the following
entities: USA Commercial Mortgage Company; USA Capital Realty Advisors,
LLC; USA Securities, LLC; USA Capital First Trust Deed Fund, LLC; and, USA
Capital Diversified Trust Deed Fund, LLC.
Thomas J. Allison Named Chief Executive Officer
The company said it has retained Mesirow Financial Interim Management
(MFIM), one of the nation's top restructuring consulting firms, to assist
in reorganizing operations and securing DIP financing in order to rebuild
the company's core loan origination, underwriting and servicing operations.
Thomas J. Allison, Mesirow executive vice president and senior managing
director, has been named chief executive officer for USA Commercial
Mortgage and its affiliates associated with the Chapter 11 petition.
Allison is considered one of the foremost professionals in the
restructuring and turnaround field, and has been managing complex
turnaround situations since 1979. Allison replaces Joseph D. Milanowski who
had been president, chief operating officer and a director of USA
Commercial Mortgage Company since 1998, and had been associated with the
company since 1993.
Statement from New CEO Allison
Allison said: "We are entering into this process with a solid plan. We
are working on liquidity to fund our commitments and to improve our
collection process. What we need is time to get our investor accounts and
loans back in order and to put the systems and processes in place to enable
the company to operate properly on a going-forward basis. If all goes well,
we hope to be able to pay creditors in full and to pay investors in
accordance with their contracts."
Company Files First-Day Motions
USA Commercial Mortgage Company has filed "first-day motions" in the
Bankruptcy Court intended to ensure that the company's business continues
to function with minimal disruption. The court filings are intended to
ensure the company is able to pay its employee wages and benefits,
suppliers, investors and borrowers; obtain interim financing; maintain cash
management programs; and, retain legal, financial and other professionals
to support the company's reorganization plans. The company has retained Ray
Quinney & Nebeker of Salt Lake City, Utah and Schwartzer & McPherson of Las
Vegas as its legal counsel for these filings.
Information Available on New Website
The company has published a new website -- http://www.usacapitalcorp.com -- to
provide a single source of information about the company, the filings, and
the progress of its reorganization. Information is available for investors,
borrowers and media on the new website which replaces the company's
previous websites.
Securities and Exchange Commission Investigation
One of the filing entities, USA Capital First Trust Deed Fund, LLC, has
disclosed in prior reports filed with the SEC that the SEC is currently
conducting an investigation of the operations of USA Capital First Trust
Deed Fund, LLC, its manager, USA Securities, LLC, USA Commercial Mortgage
Company, and USA Capital Diversified Trust Deed Fund, LLC. The SEC is
investigating possible violations of federal securities laws by these
entities. USA Securities, USA Commercial Mortgage Company and their
affiliates are cooperating fully in the investigation. The company said
that Allison, as the new CEO of the company, is conducting his own
investigation of the concerns raised by the SEC.
USA Commercial Mortgage Company
USA Commercial Mortgage Company (dba USA Capital), a privately-held
company, is one of the nation's leading real estate lenders. Since 1989,
USA Commercial Mortgage Company has provided more than $1 billion in
short-term and permanent financing to homebuilders, commercial developers,
apartment owners and institutions nationwide.
The company is licensed by the State of Nevada Mortgage Lending
Division (NV MBR #333) and has its headquarters at 4484 South Pecos Road,
Las Vegas, Nevada, 89121.



SOURCE USA Commercial Mortgage Company