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Weil Advises Walter in its Emergence from Chapter 11

Weil, Gotshal & Manges is representing Walter Investment Management Corp. and its subsidiaries (Walter), a diversified mortgage banking firm with funded debt in excess of $15 billion inclusive of $10 billion of HECM mortgage backed securities, $2 billion of mortgage backed securities and warehouse debt, and approximately $2.1 billion of corporate debt. In connection with its liability management initiative, Walter achieved a significant deleveraging transaction in connection to three debt classes comprising the $2.1 billion corporate debt. Weil, in concert with Walter’s financial advisors, negotiated a restructuring of Walter’s approximately $1.4 billion term loan, approximately $540 million of senior unsecured notes, and approximately $240 million of convertible notes.

To this end, Walter executed restructuring support agreements with ad hoc groups of term loan lenders and senior unsecured noteholders agreeing to a ground-breaking “holding company-only” filing and fully consensual pre-packaged chapter 11 restructuring. Among other things, the agreed structure eliminates approximately $800 million of corporate debt, allowing Walter’s operating subsidiaries to continue operating in the mortgage and RMBS securities market in the ordinary course of business outside of chapter 11, granted those same subsidiaries non-consensual third-party releases on account of their corporate debt guarantees (over the objection of the U.S. Trustee), and distributes 50% of the new common stock to existing stockholders – on par with the recovery of convertible noteholders – yielding one of the highest recoveries for existing equity holders in recent history.

As part of the chapter 11 process, Walter also obtained a commitment for debtor-in-possession warehouse financing which provides Walter and its operating subsidiaries with up to $1.9 billion in available warehouse financing that converts into exit financing upon emergence from chapter 11.

Effective, February 9, 2018, Walter emerged from chapter 11 under the new name Ditech Holding Corporation. 

The Weil team that represents Walter was led by Business Finance & Restructuring Department Co-Chair Ray C. Schrock, P.C. and partner Sunny Singh. The team also included Capital Markets partner Frank Adams; Public Company Advisory Group partner Lyuba Goltser; U.S. Banking & Finance Head Douglas Urquhart; Banking & Finance partner Allison Liff; Structured Finance partner Jason Smith; Mergers & Acquisitions partner Gavin Westerman; Tax partners Stuart Goldring and Mark Hoenig; Executive Compensation & Benefits Head Paul Wessel; Securities Litigation Co-Head Joseph Allerhand; Securities Litigation partners Stephen Radin, Miranda Schiller and Richard Slack; Business Finance & Restructuring associates Alexander Welch, Eli Blechman and Angeline Joong-Hui Hwang; Public Company Advisory Group associate Alicia Alterbaum; Mergers & Acquisitions associate Christina De Vuono; Structured Finance associate David Jackson; Banking & Finance associates Paul Overmyer, Sasha Shulzhenko and Rebecca Williams; Capital Markets associates Russell Wininger and Michael Stein; and Securities Litigation associates Matthew Connors, Andrew Blumberg and Calvin Lee (Not Yet Admitted in New York).

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