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Mortgage Firm With Life Subs Seeks Ch. 11 Protection

By Staff Writer

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NU Online News Service, Feb. 5, 2004, 4:33 p.m. EST – Metropolitan Mortgage & Securities Company Inc. followed through Wednesday with previously announced plans to seek Chapter 11 bankruptcy court protection.[@@]

The Spokane, Wash., mortgage company and a sister company, Summit Securities Inc., have faced accusations that they used misleading tactics to sell notes and other securities to investors.

Metropolitan, which has no connection with MetLife Inc., New York, and Summit also have several life insurance subsidiaries.

“The companies’ insurance subsidiaries are financially sound, remain operating and were not included in the filing,” Metropolitan says.

Metropolitan says it has the cash it needs to operate its business and pay its employees and vendors. The company hopes to emerge from bankruptcy by using company stock to compensate holders of its debt securities.