It seems that the monetary troubles of Ditech Holding Corp., the nonbank previously referred to as Walter Funding Administration, are removed from over.
Final 12 months, the corporate emerged from Chapter 11 chapter after finishing a monetary restructuring plan that eradicated $800 million in company debt and altered its title to Ditech Holding.
However that wasn’t sufficient to place the nonbank’s troubles behind it. Now, simply 14 months after submitting for Chapter 11, the corporate is submitting for Chapter 11, once more.
Ditech introduced early Monday morning that it, together with its subsidiaries Ditech Monetary and Reverse Mortgage Options, have entered right into a “restructuring help settlement” that may search to restructure the corporate’s debt, as a result of the final time wasn’t sufficient, apparently.
In line with the corporate, by the restructuring, the corporate is trying to eradicate $800 million extra in debt, recapitalize, enhance its liquidity, and construct an “appropriately sized working capital facility.”
To facilitate this restructuring, Ditech has filed for reorganization below Chapter 11 of the U.S. Chapter Code within the U.S. Chapter Court docket for the Southern District of New York.
In line with the corporate, it plans to proceed working whereas it’s in Chapter 11, however notes that it’s nonetheless contemplating “strategic options” that would embrace promoting the corporate, promoting off among the firm’s belongings, or altering the corporate’s enterprise mannequin.
In June 2018, Ditech warned buyers that it was exploring “strategic options to reinforce stockholder worth,” that included probably promoting the corporate. That transfer got here after its preliminary chapter proceedings, which stemmed from a lengthy string of economic losses for the corporate.
The corporate declared chapter again in December 2017, hoping that it may emerge on strong footing, however 2018 was extra of the identical for Ditech.
In November, the nonbank bumped into extra bother when it was kicked off of the New York Inventory Change over the corporate’s low share value and market cap.
After which, only a few weeks in the past, the corporate fired its chief working officer, Ritesh Chaturbedi, who’d solely been with the corporate for 9 months.
And now, the corporate is making an attempt to extinguish much more of its debt.
In line with Ditech President and CEO Thomas Marano, “market challenges” have put stress on the corporate and the corporate feels that it should make this transfer to make sure that it might probably proceed to function.
“Since we accomplished a recapitalization final February, now we have made necessary progress on our strategic initiatives and our expense administration efforts. Nonetheless, because of market challenges which have continued to speed up and stress our enterprise, we should take additional motion,” Marano stated in a press release.
“We intend to make use of this course of to restructure our steadiness sheet and assist us meet our obligations. We’ll proceed to judge a broad vary of choices with the targets of maximizing worth and creating the very best path ahead for our enterprise,” Marano added. “We’re happy to have the help of our lenders on this course of.”
One factor that’s completely different this time from the primary time Ditech filed for Chapter 11 is that its subsidiaries Ditech Monetary and Reverse Mortgage Options are included within the chapter proceedings.
In an effort to supply extra info to its clients concerning the chapter submitting, Ditech and RMS despatched letters to their clients and put out FAQs concerning the course of as nicely, which incorporates questions like: “Didn’t you undergo this course of a 12 months in the past? What’s completely different this time?”
Click on right here to learn Ditech’s letter and right here to learn RMS’ letter to clients, and click on right here to learn Ditech’s FAQs and right here to learn RMS’ FAQs.
“As we transfer ahead, we stay firmly dedicated to our mission of serving clients by the homeownership journey,” Marano concluded. “I need to thank our workers for his or her continued dedication to serving our clients. Our individuals will proceed to be the driving power behind our success.”