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SEC Filings

10-K
DITECH HOLDING CORP filed this Form 10-K on 04/16/2019
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31. Subsequent Events
On January 16, 2019, the Parent Company and certain of its subsidiaries entered into forbearance agreements with (i) certain holders of greater than 75% of the aggregate principal amount of the outstanding Second Lien Notes, (ii) certain lenders of greater than 50% of the aggregate principal amount outstanding under the 2018 Credit Agreement and the administrative agent and collateral agent under the 2018 Credit Agreement and (iii) the requisite buyers and variable funding noteholders, as applicable, under certain warehouse facility agreements. Pursuant to the forbearance agreements, the parties noted above agreed to temporarily forbear from the exercise of any rights or remedies they may have in respect of the aforementioned anticipated events of default or other defaults or events of default arising out of or in connection therewith.
On February 8, 2019, the Parent Company and certain of its subsidiaries entered into additional forbearance agreements with (i) certain lenders holding greater than 50% of the sum of (a) the loans outstanding, (b) letter of credit exposure and (c) unused commitments under the 2018 Credit Agreement at such time and the administrative agent and collateral agent under the 2018 Credit Agreement, (ii) the requisite buyers and variable funding noteholders, as applicable, under certain warehouse facility agreements and (iii) the counterparty under a certain master securities forward transaction agreement.
On February 11, 2019, as contemplated by the DHCP RSA, the Debtors filed the DHCP Bankruptcy Petitions and the DHCP Chapter 11 Cases commenced thereby under the Bankruptcy Code in the Bankruptcy Court. Consistent with the DHCP RSA, on March 5, 2019, the Debtors filed the DHCP Plan with the Bankruptcy Court seeking to emerge from Chapter 11 on an expedited timeframe. The Debtors filed an amended DHCP Plan with the Bankruptcy Court on March 28, 2019. The Debtors are continuing to operate their businesses as debtors in possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. The Company intends to continue to operate its businesses during the pendency of the DHCP Chapter 11 Cases. To assure ordinary course operations, the Debtors have obtained approval from the Bankruptcy Court for a variety of first day motions seeking various relief, authorizing them to maintain their operations in the ordinary course.
Restructuring Support Agreement
On February 8, 2019, the Debtors entered into the DHCP RSA with the Consenting Term Lenders holding, as of February 11, 2019, more than 75% of the term loans outstanding under the 2018 Credit Agreement.
Pursuant to the DHCP RSA, the Consenting Term Lenders and the Debtors have agreed to the principal terms of a financial restructuring of the Company, which will be implemented through a prearranged plan of reorganization under the Bankruptcy Code and which provides for the restructuring of the Company's indebtedness through a recapitalization transaction that is expected to reduce gross corporate debt by over $800 million and provide the reorganized company with an appropriately sized working capital facility upon emergence from the DHCP Reorganization Transaction.
The DHCP RSA also provides for the continuation of the Company’s prepetition review of strategic alternatives, whereby, as a potential alternative to the implementation of a DHCP Reorganization Transaction, any and all bids for the Company or its assets will be evaluated as a precursor to confirmation of any Chapter 11 plan of reorganization.
The review of strategic alternatives provides a public and comprehensive forum in which the Debtors are seeking bids or proposals for three types of potential transactions, as described below. If a bid or proposal is received representing higher or better value than the DHCP Reorganization Transaction, it will either be incorporated into the DHCP Reorganization Transaction or pursued as an alternative to the DHCP Reorganization Transaction in consultation with the Consenting Term Lenders and subject to the DHCP RSA.
The three types of transactions for which bids are being solicited are:
a sale transaction meaning, a sale of substantially all of the Company’s assets, as provided in the DHCP RSA;
an asset sale transaction meaning, the sale of a portion of the Company’s assets other than a sale transaction consummated prior to DHCP Effective Date; provided such sale shall only be conducted with the consent of the Requisite Term Lenders; and
a master servicing transaction meaning, as part of the DHCP Reorganization Transaction to the extent the terms thereof are acceptable to the Requisite Term Lenders, entry by the Company into an agreement or agreements with an approved subservicer or subservicers whereby, following the DHCP Effective Date, all or substantially all of the Company’s mortgage servicing rights are subserviced by the new subservicer.
The DHCP RSA presently contemplates the following treatment for certain key classes of creditors under the DHCP Reorganization Transaction:
DHCP DIP Warehouse Facilities Claims - On the DHCP Effective Date, the holders of DHCP DIP Warehouse Facilities claims will be paid in full in cash;

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