Walter Investment Emerges from Chapter 11

Walter Investment Management Corp. Announces Anticipated Date of Emergence From Chapter 11 Proceedings and Start of Trading in New Common Stock

FORT WASHINGTON, Pa., Feb. 7, 2018 /PRNewswire/ — As previously announced, Walter Investment Management Corp. (the “Company”) (NYSE: WAC.BC) received approval of its prepackaged financial restructuring plan (the “Prepackaged Plan”) from the United States Bankruptcy Court for the Southern District of New York on January 17, 2018. The Company currently anticipates that all remaining conditions precedent to the Prepackaged Plan will be satisfied and that the Company will emerge from Chapter 11 on February 9, 2018 (the “Effective Date”). Assuming the Company emerges on February 9, 2018, trading in the Company’s new common stock will commence on February 12, 2018. The Company intends to change its name to Ditech Holding Corporation on the Effective Date and will trade under the symbol “DHCP” thereafter.

Additional Information

Additional information about the Company’s financial restructuring is available on the Company’s website at http://walterinvestment.com/restructuring.html or by calling the Company’s Restructuring Hotline, toll-free at 866-430-6844 or 1-646-796-6176 for calls originating outside the U.S. Questions can also be emailed to walterinfo@primeclerk.com. In addition, court filings and other documents related to the court proceedings are available on a separate website administered by Walter’s claims agent, Prime Clerk, at http://cases.primeclerk.com/Walter.

Advisors

Weil, Gotshal & Manges LLP is acting as legal counsel, Houlihan Lokey is acting as investment banking debt restructuring advisor and Alvarez & Marsal North America, LLCis acting as financial advisor to the Company in connection with the financial restructuring.

About Walter Investment Management Corp.

The Company is an independent servicer and originator of mortgage loans and servicer of reverse mortgage loans. Based in Fort Washington, Pennsylvania, the Company has approximately 4,100 employees and services a diverse loan portfolio. For more information about the Company, please visit the Company’s website at www.walterinvestment.com. The information on the Company’s website is not a part of this release.


Item 7.01 Regulation FD Disclosure.

As previously disclosed, on November 30, 2017, the Company filed a voluntary petition (the case commenced thereby, the “Chapter 11 Case”) under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the “Court”) to pursue its previously announced Prepackaged Chapter 11 Plan of Reorganization, dated November 6, 2017 (as amended and supplemented, the “Prepackaged Plan”). The Company’s Chapter 11 Case is being administered under the caption In re Walter Investment Management Corp. (Case No. 17-13446). Also, as previously disclosed, on January 18, 2018, the Court entered an order confirming the Prepackaged Plan. The Company anticipates emerging from the Chapter 11 Case on the date (the “Effective Date”) when all remaining conditions to effectiveness to the Prepackaged Plan are satisfied.

The Company is continuing to work towards satisfying the remaining conditions precedent to the Prepackaged Plan and expects to emerge from bankruptcy in the near term.

Name Change and NYSE Listing Approval

The Company intends to change its name to Ditech Holding Corporation on the Effective Date. On January 24, 2018, the Company received approval to list on the New York Stock Exchange 4,252,500 shares of new common stock, par value $0.01 per share (“New Common Stock”), issuable upon the Effective Date and 27,685,000 shares of New Common Stock reserved for issuance under the Company’s management incentive plan or for issuance upon conversion or exercise of its Series A Warrants, Series B Warrants and Mandatorily Convertible Preferred Stock, upon official notice of issuance. The New Common Stock is expected to trade under the symbol DHCP.

On the Effective Date, the Company expects to issue the following equity and equity-linked securities:

 

4,252,500 shares of New Common Stock;

 

100,000 shares of Mandatorily Convertible Preferred Stock, face amount $1,000, convertible into 11,497,500 shares of New Common Stock;

 

7,245,000 Series A Warrants, exercisable for 7,245,000 shares of New Common Stock; and

 

5,748,750 Series B Warrants, exercisable for 5,748,750 shares of New Common Stock

The Company also will have reserved for issuance 3,193,750 shares of New Common Stock issuable under the Company’s management incentive plan.

 

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Cash Forecast and Performance

The Company is in the process of preparing its 2018 annual business plan (the “draft 2018 business plan”). The draft 2018 business plan will not be completed prior to the Effective Date, and has not been reviewed or approved by either the Company’s current Board of Directors or the persons who will comprise the Board of Directors (the “New Board”) on and after the Effective Date.

In the course of preparing the draft 2018 business plan to present to the New Board for approval after the Effective Date, the Company has preliminarily reviewed its expected cash position for fiscal 2018 in consultation with its debt restructuring advisors. Based on that preliminary review, the Company is updating its projection of the Company’s cash on hand at December 31, 2018 (“December 2018 Ending Cash”), as compared to the projection of “Ending Cash” as of December 31, 2018 included in the Disclosure Statement for the Prepackaged Plan (the “Disclosure Statement”), which was previously filed with the Securities and Exchange Commission (“SEC”) as an exhibit to the Company’s Current Report on Form 8-K, dated November 6, 2017. The Company currently estimates, based on its preliminary and continuing review, that December 2018 Ending Cash will be approximately $210 million, as compared to the projected estimate of $261 million set forth in the Disclosure Statement. The variance is the result of a variety of factors, including timing considerations, matters relating to servicer advances and updated working capital assumptions.

In addition, the Company is in the process of preparing its 2017 financial statements, which financial statements remain subject to completion and audit. Based on preliminary analysis, the Company expects that its Adjusted EBITDA for the year ended December 31, 2017 will be moderately lower than its projection of Adjusted EBITDA for the year included in the Disclosure Statement. The variation is due to continued expenses and charges in the Company’s Servicing and Reverse segments, principally associated with default servicing operations, which were partially offset by performance in excess of expectations in the Company’s Originations segment. The Company is not updating or revising the projection for Adjusted EBITDA for the year ended December 31, 2018 included in the Disclosure Statement, which the Company believes continues to be materially consistent with its current preliminary estimates for the year.

The Company believes that the Prepackaged Plan remains feasible notwithstanding the variances described herein.

Reference is made to the Disclosure Statement, the assumptions, qualifications and explanations and other limitations and risk factors set forth or referred to therein, and the Company’s historical financial statements and other information filed with the SEC, and the update provided herein should be considered with reference thereto. The Company does not intend to, and undertakes no obligation to, update, comment upon or otherwise revise the projections and other forward-looking information contained herein or elsewhere to reflect events or circumstances existing or arising after the date made or to reflect the occurrence of unanticipated events. Therefore, such projections should not be relied upon as a guarantee or other assurance of the actual results that will occur and, accordingly, undue reliance should not be placed on such information. The Company is not updating, revising, confirming or commenting upon any projections or forward-looking statements previously made by or on behalf of the Company, except to the limited extent set forth herein.

 

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After the Effective Date, the Company will continue reporting financial results and other information, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, for completed quarterly and annual periods on Forms 10-Qand 10-K in accordance with SEC rules, and does not expect to provide projected financial information of the nature included in the Disclosure Statement or similar forward-looking statements.

Monthly Operating Report

On January 23, 2018, the Company filed its monthly operating report for the period beginning December 1, 2017 and ending December 31, 2017 (the “Monthly Operating Report”) with the Court. On February 2, 2018, the Company filed with the Court an updated Monthly Operating Report (the “Updated Monthly Operating Report”). The Updated Monthly Operating Report is attached hereto as Exhibit 99.2, and is incorporated herein by reference. This Current Report on Form 8-K (including the exhibits hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely by Regulation FD.

The information contained in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.


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