For more than 50 years, Ditech Holding Corporation (“Ditech”) has offered a wide array of loans across the credit spectrum. In recent years, Ditech has been impacted by significant operational challenges and industry trends that have severely constrained its liquidity.
On February 11, 2019, Ditech entered into a Restructuring Support Agreement (the “RSA”) with certain lenders holding more than 75% of its term loans. The RSA allowed Ditech to pursue a recapitalization that deleveraged its capital structure by extinguishing over $800 million in corporate debt, and a liquidity enhancing transaction that included an appropriately sized working capital facility at emergence.
To facilitate this financial restructuring, Ditech and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on February 11, 2019.
Ditech’s Consumer Creditors’ Committee (the “Committee”) disagreed with the original Plan because it did not sufficiently protect borrowers’ rights. Ditech worked with the Committee to develop a bankruptcy plan to sell the companies while protecting borrowers’ rights. Ditech was sold to New Residential Investment Corp. and Waterfall Asset Management LLC.
On September 22, 2019, the Debtors filed the Third Amended Joint Chapter 11 Plan of Ditech Holding Corporation and Its Affiliated Debtors. The Bankruptcy Court confirmed the Chapter 11 Plan on September 26, 2019, and the Plan went effective on September 30, 2019. Jobs were saved and the company emerged from bankruptcy better positioned to thrive.
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