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SEC Filings

DITECH HOLDING CORP filed this Form 10-K on 04/16/2019
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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 our assets, as provided in the DHCP RSA;
an asset sale transaction meaning, the sale of a portion of our 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 into an agreement or agreements with an approved subservicer or subservicers whereby, following the DHCP Effective Date, all or substantially all of our 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;
Term Loan Claims - On the DHCP Effective Date, the holders of Term Loan Claims will receive their pro rata share of new term loans under an amended and restated credit facility agreement in the aggregate principal amount of $400 million, and 100% of our New Common Stock, which will be privately held;
Second Lien Notes Claims - On the DHCP Effective Date, the holders of the Second Lien Notes will not receive any distribution;
Go-Forward Trade Claims - On the DHCP Effective Date, trade creditors identified by us (with the consent of the Requisite Term Lenders) as being integral to and necessary for the ongoing operations of New Ditech) will receive a distribution in cash in an amount equaling a certain percentage of their claim, subject to an aggregate cap; and
Existing Equity Interests - On the DHCP Effective Date, holders of our existing preferred stock, common stock, and warrants will have their claims extinguished.
If the Debtors proceed to confirmation of a sale transaction, the Debtors will distribute proceeds of such transaction in accordance with the priority scheme under the Bankruptcy Code.
Under the DHCP RSA, on the Election Date, the Electing Term Lenders may deliver an election notice to us stating that the Electing Term Lenders wish to consummate an elected transaction as follows: (i) the DHCP Reorganization Transaction, or (ii) master servicing transaction (as part of the DHCP Reorganization Transaction), or (iii) sale transaction, and, if applicable, (iv) in connection and together with an election of (i), (ii), or (iii), any asset sale transaction(s), provided that inclusion of any asset sale transaction(s) is not incompatible with successful consummation of the elected transaction in (i), (ii) or (iii). If the Debtors do not proceed with the elected transaction, the Consenting Term Lenders can terminate the DHCP RSA.
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. We intend to continue to operate our businesses in the ordinary course 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.
The filing of the DHCP Bankruptcy Petitions described above triggers an event of default or an early amortization event under certain of our debt instruments, as described further in the Corporate Debt section below. The filing of the DHCP Bankruptcy Petitions also triggers the liquidation preference of our Mandatorily Convertible Preferred Stock. Certain of our obligations, including the payment of interest under our debt instruments, are stayed under the Bankruptcy Code during the pendency of the DHCP Chapter 11 Cases.