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SEC Filings

10-K
DITECH HOLDING CORP filed this Form 10-K on 04/16/2019
Entire Document
 

Reorganization Items and Fresh Start Accounting Adjustments
The Company's reorganization items and fresh start accounting adjustments consist of the following (in thousands):
 
 
Successor
 
 
Predecessor
 
 
For the Period From February 10, 2018 Through December 31, 2018
 
 
For the Period From January 1, 2018 Through February 9, 2018
 
For the Year Ended 
 December 31, 2017
Gain on cancellation of corporate debt
 
$

 
 
$
556,937

 
$

Less: issuance of new equity to Convertible and Senior Noteholders
 

 
 
153,764

 

Net gain on cancellation of corporate debt
 

 
 
403,173

 

Less:
 
 
 
 
 
 
 
Legal and professional fees (1)
 
2,123

 
 
12,461

 
3,098

Write-off deferred debt issuance costs and discounts
 

 
 

 
34,406

Other expenses
 
603

 
 
3,378

 
141

Total expenses
 
2,726

 
 
15,839

 
37,645

Total reorganization items
 
(2,726
)
 
 
387,334

 
(37,645
)
Fresh start accounting adjustments
 

 
 
77,229

 

Reorganization items and fresh start accounting adjustments
 
$
(2,726
)
 
 
$
464,563

 
$
(37,645
)
__________
(1)
Professional fees are directly related to the WIMC Reorganization.
The Company made cash payments for reorganization items of $11.8 million and $5.7 million during the period from February 10, 2018 through December 31, 2018 and the period from January 1, 2018 through February 9, 2018, respectively. There were no payments made for the year ended December 31, 2017.
Liabilities Subject to Compromise
Liabilities subject to compromise included unsecured or under-secured liabilities incurred prior to the WIMC Effective Date. These liabilities represented the amounts expected to be allowed on known or potential claims to be resolved through the WIMC Chapter 11 Case and subject to future adjustments based on negotiated settlements with claimants, actions of the Bankruptcy Court, rejection of executory contracts, proofs of claims or other events. Generally, actions to enforce or otherwise effect payment of prepetition liabilities are subject to the automatic stay or an approved motion of the Bankruptcy Court.
Liabilities subject to compromise consist of the following (in thousands):
 
 
Predecessor
 
 
December 31, 2017
Senior Notes
 
$
538,662

Convertible Notes
 
242,468

Accrued interest (1)
 
25,807

Total liabilities subject to compromise
 
$
806,937

__________
(1)
Represents accrued interest on the Senior Notes and Convertible Notes as of November 30, 2017, the date the Company filed the WIMC Bankruptcy Petition. As interest on the Senior Notes and Convertible Notes subsequent to November 30, 2017 was not expected to be an allowed claim, this amount excludes interest that would have been accrued subsequent to November 30, 2017. Interest expense reported on the consolidated statements of comprehensive income (loss) for the period from January 1, 2018 through February 9, 2018 and the year ended December 31, 2017 excludes $5.9 million and $4.4 million, respectively, of interest on the Senior Notes and Convertible Notes that otherwise would have been accrued for the periods.
On the WIMC Effective Date, all of the Company's obligations under the previously outstanding Convertible Notes and Senior Notes listed above were extinguished. Previously outstanding debt interests were exchanged for Second Lien Notes, common stock, Mandatorily Convertible Preferred Stock, Series A Warrants and/or Series B Warrants, as applicable. Refer to Note 25 for additional information.

F-13