Amid ongoing losses, a deal reached with its creditors has Walter Investment Management Corp. filing a pre-packaged bankruptcy.
Walter previously reported a $93 million second-quarter loss and disclosed amended financial reports for last year.
At the time, the Fort Washington, Pennsylvania-based organization warned about its ability to continue as a going concern because of continued losses.
On Friday, Walter said it has reached agreements with creditors that has it cutting its outstanding corporate debt by $700 million.
The deal includes
a restructuring support agreement with terms that have Walter “soliciting votes from the lenders, the note holders, and the convertible note holders on a pre-packaged chapter 11 plan of reorganization.”
After the solicitation, which is expected to start next month, Walter intends to voluntarily file the pre-packaged plan of reorganization under chapter 11 of the U.S. Bankruptcy Code late next month.
The reorganization process could potentially be done by the end of this year and likely no later than Jan. 31, 2018.
“Through these agreements, we expect to quickly restructure our debt while ensuring that business will continue as normal,” Walter Investment President and Chief Executive Officer Anthony Renzi stated in the announcement. “The support of our lenders demonstrates their confidence in our business, and we believe that we are on the right track to emerge from this process better positioned for continued growth and success.”
Only the parent company will be included in the reorganization. Excluded are
Ditech Financial LLC and Reverse Mortgage Solutions Inc., which are expected to continue operations in the ordinary course throughout the restructuring process.
“The company believes it has ample liquidity to support its businesses and the costs of the restructuring,” the statement said.
Shares of Walter, which had traded as high as $7.50 less than a year ago, were trading at 45 cents Monday.
