American Mortgage Acceptance Co. gained federal approval Thursday of its plan to rebound from bankruptcy. US Bankruptcy Judge Martin Glenn of the Southern District of New York approved the real estate investment trust's (REIT) plans to reorganize by giving creditors stock in a new company. American Mortgage Acceptance Co. filed for Chapter 11 bankruptcy protection in late April when the REIT held $6.4m worth of assets outweighed by $120m in liabilities. Coverage in Bloomberg said the company will transfer some assets to Taberna Preferred Funding, a Philadelphia-based bond investment firm, to satisfy its claims. The company will also issue new common stock to capital markets firm, C3 Initial Assets. Entering bankruptcy, American Mortgage Acceptance owed Taberna more than $25m in April and owed C3 $93m. Bloomberg reported that equity holders will get nothing. The REIT sector experienced a revival in early 2010 from a harsh period spanning 2008 and 2009. Mortgage REITs like American Mortgage Acceptance currently yield 7.36% returns, according to the National Association of Real Estate Investment Trusts' August summary of REIT activity. Although this is an improvement, mortgage REITs yield only half the return of equity REITs, which currently yield 15.61%, and a fraction of the return yielded by hybrid REITs, at 44.32%. The All REIT Index is currently at 15.06% return. Write to Christine Ricciardi.