REIT Submits a Plan for Reorganization of Its Debt

Mortgage & Realty Trust, a major real estate investment trust that sought bankruptcy court protection despite being profitable, said Monday that it submitted a reorganization plan that calls for full repayment of its debts.

The plan also calls for Mortgage & Realty, an Elkins Park, Pa.-based concern that has executive offices in Burbank, to resume dividend payments so it can keep its status as an REIT. Such trusts escape corporate income taxes if nearly all of their profit is distributed to stockholders.

Mortgage & Realty suspended its dividends when it filed under Chapter 11 of the U.S. Bankruptcy Code on April 12. Under Chapter 11, a company is shielded from creditors’ lawsuits while it works out a plan to pay its bills. Creditors’ claims--all unsecured--totaled $397 million as of June 30. Mortgage & Realty’s assets totaled $595 million.