Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11

Walter Investment Management Chapter 11 Petition, Plan Filed

Walter Investment Management filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, case number 17-13446. The Company, which focuses primarily on the servicing and origination of residential loans, is represented by Sunny Singh of Weil, Gotshal & Manges. Operating entities Ditech Financial and Reverse Mortgage Solutions are not expected to file for Chapter 11 and are expected to continue their operations in the ordinary course. Concurrent with the Chapter 11 petition, the Company also filed a Prepackaged Chapter 11 Plan of Reorganization and related Disclosure Statement. The Plan incorporates restructuring support agreements (RSAs) the Company reached with certain lenders holding term loans under the Company's amended and restated credit agreement and certain holders of its outstanding 7.875% Senior Unsecured Notes due 2021. The Company's lenders, senior noteholders and holders of the Company's outstanding 4.50% Convertible Senior Subordinated Notes due 2019 (that voted in the recently completed solicitation of the Plan voted overwhelmingly to approve the Prepackaged Plan, with 100.00% of the lenders (by amount voted), 99.24% of the senior noteholders (by amount voted) and 99.99% of convertible noteholders (by amount voted) voting to approve. According to the Disclosure Statement, "Through the Restructuring, the Company expects to reduce its outstanding corporate debt by approximately $600 million (from approximately $2.1 billion as of September 30, 2017, to approximately $1.5 billion as of the day after the Effective Date of the Restructuring), extend the maturity date of its Term Loan, and enhance the Company's financial flexibility as it continues the ongoing transformation of its business." The Company is seeking a combined hearing to consider both the Disclosure Statement and Plan. Walter Investment Management has obtained a commitment for warehouse financing guaranteed by Walter Investment Management, which, subject to Court approval, will provide the Company, Ditech Financial and Reverse Mortgage Solutions with up to $1.9 billion in available warehouse financing that is expected to convert into exit financing in the same amount.

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