Walter Investment Management Corp.’s plan to reduce $800 million in debt by filing for Chapter 11 bankruptcy has been approved by a federal court, the company announced this week.
Back in December, Walter announced that it planned to file for Chapter 11 bankruptcy as part of a prepackaged restructuring plan to cut its debt and secure the company’s future.
According to the company, the United States Bankruptcy Court for the Southern District of New York approved its prepackaged financial restructuring plan, and the company plans to emerge from Chapter 11 by no later than Jan. 31, 2018.
The company said it is “on track” to complete its financial restructuring in the first quarter of 2018.
According to the company, the operations of its prominent subsidiaries, Ditech Financial and Reverse Mortgage Solutions, are not affected by the parent company’s bankruptcy proceedings.
The company also announced that its board of directors will look much different when it exits bankruptcy.
While not official, the company announced a proposed board of directors that only includes three of Walter’s eight current board members.
The new board will consist of nine members.
Current directors George Awad, who is chairman of the board, Daniel Beltzman, manager and general partner of Birch Run Capital Advisors, and Neal Goldman, managing member of SAGE Capital Investments, will continue to serve as directors.
The board’s four other independent directors, Michael Bhaskaran, chief supply chain officer at Staples, William Meurer, trustee of LifeLink Foundation, Alvaro de Molina, former CEO of GMAC Financial Services, and Vadim Perelman, managing member & chief investment officer of Baker Street Capital Management, will be exiting.
Interestingly, also exiting the board will be Anthony Renzi, who currently serves as Walter’s president and CEO.
Replacing the exiting board members will be Frederick Arnold, David Ascher, Seth Bartlett, Claude LeBlanc, Thomas Marano, and Thomas Miglis, who have each been designated by an ad hoc group of consenting senior noteholders.
“We look forward to officially welcoming the incoming members of our board, who will bring proven track records and new perspectives from both inside and outside our industry, and will play an important role in helping guide our company forward following our financial restructuring process,” Awad said. “Once formally appointed, I look forward to working closely with them to create value as we advance our mission of serving our customers throughout the homeownership journey.”
The company plans to formally appoint its new board after it exits bankruptcy.
“I would also like to thank Walter's outgoing board members for their service to the company,” Awad added. “Their leadership was instrumental in building Walter into a diversified mortgage banking company and they helped oversee the transformation that is expected to position our company for future growth and success.”