Walter Investment Management Corp. (NYSE:WAC) Files An 8-K Bankruptcy or ReceivershipItem 1.03.
|•||The Company will issue to holders of Senior Notes Claims:|
|•||$250million aggregate principal amount of secured second lien notes subordinated in right of payment to certain Senior Obligations (as defined in the indenture for the New Second Lien Notes) having the terms described in the Prepackaged Plan; and|
|•||$100million aggregate initial liquidation preference of Mandatorily Convertible Preferred Stock having the terms described in the Prepackaged Plan, convertible into 73% of the total number of issued and outstanding shares of New Common Stock as of the Effective Date subject to dilution by shares of New Common Stock issued or issuable to the Management Incentive Plan and by shares of New Common Stock issued after the Effective Date, including shares of New Common Stock issuable to the New Warrants.|
|•||Each holder of a Convertible Notes Claim will receive its pro rata share of (i)New Common Stock representing, in the aggregate, 50% of the New Common Stock issued on the Effective Date, subject to dilution by shares of New Common Stock issuable upon conversion of the Mandatorily Convertible Preferred Stock, shares of New Common Stock issued or issuable to the Management Incentive Plan and shares of New Common Stock issued after the Effective Date, including to the New Warrants, and (ii) 50% of the New Warrants. The Convertible Notes will be cancelled without further action by or order of the Court;|
|•||Each holder of an Existing Equity Interest will receive its pro rata share of (i)New Common Stock representing, in the aggregate, 50% of the New Common Stock issued on the Effective Date, subject to dilution by shares of New Common Stock issuable upon conversion of the Mandatorily Convertible Preferred Stock, shares of New Common Stock issued or issuable to the Management Incentive Plan and shares of New Common Stock issued after the Effective Date, including to the New Warrants, and (ii) 50% of the New Warrants. All Existing Equity Interests will be cancelled without further action by or order of the Court; and|
|•||The New Warrants issued to the holders of Convertible Notes Claims and Existing Equity Interests will be 10 year warrants in two (2)separate tranches, on the terms described in the Prepackaged Plan.|
|•||Unless a holder of a General Unsecured Claim agrees to a less favorable treatment, (i)the Company or Reorganized WIMC, as applicable, will continue to pay or treat such General Unsecured Claim in the ordinary course of business or (ii)such holder will receive such other treatment so as to render such General Unsecured Claim Unimpaired, in each case subject to all defenses or disputes the Company may assert as to the validity or amount of such Claims.|
|•||All priority tax claims, other priority claims, and other secured claims, other than those claims otherwise referenced herein, will be unimpaired under the Prepackaged Plan and/or paid in full in the ordinary course of business.|
|•||The Prepackaged Plan includes releases for the Company and the Consenting Term Lenders and Consenting Senior Noteholders. In addition, the Prepackaged Plan provides for releases of the Company’s subsidiaries with respect to their guarantees under the Prepetition Credit Agreement and the Prepetition Senior Notes Indenture, without the need for the Company’s subsidiary guarantors to file for chapter 11.|
As of December31, 2017, the Company had 37,373,551 shares of common stock issued and outstanding. By operation of the Prepackaged Plan, on the Effective Date, all shares of the Company’s common stock will be cancelled and will permanently cease to exist, and the New Common Stock will be issued as set forth in the Prepackaged Plan.
On the Effective Date, the Company expects to issue New Common Stock, New Warrants and Mandatorily Convertible Preferred Stock as described above. The final number of shares of New Common Stock, New Warrants and Mandatorily Convertible Preferred Stock will be determined prior to the Effective Date. The Articles of Amendment and Restatement of the Company, which will be filed with the Department of Assessments and Taxation of the State of Maryland on or prior to the Effective Date, will include the amount of authorized shares of New Common Stock and Mandatorily Convertible Preferred Stock which will be determined prior to the Effective Date.
Assets and Liabilities
As of September30, 2017, the Company’s total consolidated assets were approximately $14.98billion and total consolidated liabilities were approximately $15.22billion. This financial information has not been audited by the Company’s independent registered public accounting firm and may be subject to future reconciliation or adjustments. This information should not be viewed as indicative of future results.
Post-Emergence Board of Directors
On the Effective Date, in accordance with the terms of the Prepackaged Plan confirmed by the Court, the board of directors of Reorganized WIMC (the “New Board”) will consist of nine (9)members, with six (6)directors designated by the Requisite Senior Noteholders (Frederick Arnold, David Ascher, Seth Bartlett, Claude LeBlanc, Thomas Marano and Thomas Miglis) and three (3)directors designated by the Company (George M. Awad, Daniel Beltzman and Neal Goldman).
|Item 1.03.||Regulation FD Disclosure.|
On January 17, 2018, the Company issued a press release announcing the approval of the Prepackaged Plan. A copy of the press release is being furnished as Exhibit 99.1 and is incorporated into this Item 1.03 by reference.
The information furnished to Item 1.03 shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not subject to the liabilities of that section and is not deemed incorporated by reference in any of the Company’s filing under the Securities Act of 1933, as amended (the “Securities Act”), unless specifically identified therein as being incorporated therein by reference.
The Company cautions that trading in the Company’s securities during the pendency of the Chapter 11 Case is highly speculative and poses substantial risks. As discussed above, the Prepackaged Plan has been approved by the Court, and to the Prepackaged Plan, the Company’s common stock, as well as all unexercised options, warrants or rights to acquire or receive an equity interest in the Company, in each case, outstanding immediately prior to effectiveness of the Prepackaged Plan, will be cancelled and cease to exist on the Effective Date, and the holders of the Company’s common stock will receive only the pro rata portion of New Common Stock as set forth in the Prepackaged Plan. Even though the Company’s common stock continues to trade on the New York Stock Exchange (the “NYSE”), under the Prepackaged Plan, its underlying value may be significantly less than the current trading price on the NYSE, and the Company’s stockholders should not view the trading activity of the Company’s common stock on the NYSE or any other market or trading platform as being indicative of any value they would receive in respect of the Company’s common stock in connection with the Chapter 11 Case.
Certain statements in this Current Report on Form 8-K constitute “forward-looking statements” within the meaning of Section27A of the Securities Act and Section21E of the Exchange Act. Statements that are not historical fact are forward-looking statements. Certain of these forward-looking statements can be identified by the use of words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “assumes,” “may,” “should,” “could,” “would,” “shall,” “will,” “seeks,” “targets,” “future,” or other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors, and our actual results, performance or achievements could differ materially from results, performance or achievements expressed in these forward-looking statements. Such statements include, but are not limited to, statements relating to the Prepackaged Plan and Chapter 11 Case, descriptions of management’s strategy, plans, objectives, expectations, or intentions and descriptions of assumptions underlying any of the above matters and other statements that are not historical fact.
These forward-looking statements are based on the Company’s current beliefs, intentions and expectations and are not guarantees or indicative of future performance, nor should any conclusions be drawn or assumptions be made as to any potential outcome of any proposed transactions the Company considers. Risks and uncertainties relating to the restructuring include: the Court’s rulings in the Chapter 11 Case and the outcome of the Chapter 11 Case in general; the length of time the Company will operate under Chapter 11; risks associated with third-party motions in the Chapter 11 Case, which may interfere with the Company’s ability to develop and consummate the Prepackaged Plan or other plan of reorganization; the ability to satisfy all conditions precedent to the Prepackaged Plan; the ability of the Company to successfully execute the Prepackaged Plan without substantial disruption to the business of, or a Chapter 11 bankruptcy filing by, one or more of its primary operating or other subsidiaries; the effects of disruption from the restructuring making it more difficult to maintain business, financing and operational
relationships, to retain key executives and to maintain various licenses and approvals necessary for the Company to conduct its business; increased legal and advisor costs related to the Chapter 11 Case and other litigation and the inherent risks involved in a bankruptcy process; the ability of the Company to comply with the terms of its restructuring support agreements, including completing various stages of the restructuring within the dates specified by the restructuring support agreements; the ability of the Company to maintain the listing of its common stock on the NYSE; and the ability of the Company to continue as a going concern. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those factors, risks and uncertainties described in more detail under the heading “Risk Factors” and elsewhere in the Company’s annual and quarterly reports, including amendments thereto, and other filings with the Securities and Exchange Commission.
The above factors, risks and uncertainties are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond the Company’s control. New factors, risks and uncertainties emerge from time to time, and it is not possible for management to predict all such factors, risks and uncertainties. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore any of these statements may prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the Company’s objectives and plans will be achieved. These forward-looking statements speak only as of the date such statements were made or any earlier date indicated, and the Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes in underlying assumptions or otherwise. If the Company were in any particular instance to update or correct a forward-looking statement, investors and others should not conclude that the Company would make additional updates or corrections thereafter.
Nothing in this Current Report on Form 8-K (including, without limitation, Exhibit 99.1) shall constitute a solicitation of any holders of any of the Company’s indebtedness or the Company’s securities with respect to the matters contemplated in the Prepackaged Plan or Disclosure Statement or an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities of the Company, which would be made only to definitive documents and an applicable exemption from the Securities Act.
|Item 1.03.||Financial Statements and Exhibits.|
See Exhibit Index
WALTER INVESTMENT MANAGEMENT CORP ExhibitEX-2.1 2 d507541dex21.htm EX-2.1 EX-2.1 Exhibit 2.1 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re : : Chapter 11 WALTER INVESTMENT MANAGEMENT : CORP.,…To view the full exhibit click
About Walter Investment Management Corp. (NYSE:WAC)
Walter Investment Management Corp. is a diversified mortgage banking firm focused primarily on the servicing and origination of residential loans, including reverse loans. The Company operates through three segments: Servicing, Originations and Reverse Mortgage. The Servicing segment consists of operations that perform servicing for third-party credit owners of mortgage loans, as well as its own mortgage loan portfolio. The Servicing segment also includes Insurance, and Loans and Residuals businesses. The Originations segment consists of operations that originate and purchase mortgage loans that are intended for sale to third parties. The Reverse Mortgage segment consists of operations which purchases and originates home equity conversion mortgage that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings.