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More trouble for Ditech? Company now exploring “strategic alternatives”

Nonbank exited bankruptcy in February, but that may not be enough

Is there more trouble brewing for Ditech Holding Corp., the nonbank formerly known as Walter Investment Management?

Back in February, Walter Investment emerged from Chapter 11 bankruptcy, having successfully completed a financial restructuring plan that eliminated $800 million in corporate debt.

Upon exiting from bankruptcy, the company changed its name to Ditech Holding, adopting the name of its prominent subsidiary, Ditech Financial.

But with the bankruptcy now in the past, it appears that Ditech hasn’t outrun its troubles yet.

The company announced this week that its board of directors is about to begin exploring “strategic alternatives to enhance stockholder value.”

According to the company, its board has engaged with financial and legal advisors to determine the best course of action for the company’s future.

Included among the possible outcomes of this process are selling the company, a “business combination,” or continuing as a standalone company.

According to the company, it is undertaking this process as a result of its board receiving “certain inquiries” about the company’s direction.

“Having completed our financial restructuring and as we focus on optimizing our business, our board believes that now is the right time to review the company’s strategic alternatives to assess how best to drive value for our stockholders,” Ditech CEO, President, and Chairman of the Board Tom Marano said in a statement.

“We will undertake a comprehensive and thorough review with the assistance of our advisors,” Marano continued. “During this review, the entire Ditech Holding team will remain focused on advancing our mission of serving our customers throughout the homeownership journey and creating value for our stockholders.”

According to the company, it has contracted Houlihan Lokey to serve as financial advisor and Weil, Gotshal & Manges to serve as its legal counsel in this process.

In a release, the company cautioned that there can be “no assurance” that the exploration of alternatives will result in any transaction or action.

The company also said that it will not be discussing or disclosing any developments in the process until the company “has entered into a definitive agreement that is material to the company or the company has otherwise determined that further disclosure is appropriate or required by law.”

Additionally, the company said that there is no timetable for when it will complete the strategic review process.

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