Walter Investment Management Corporation (NYSE: WAC.BC) voluntarily entered Chapter 11 bankruptcy protection late Thursday night, after the required number of lenders and noteholders approved the company’s prepackaged plan.
The Fort Washington, Pa.-based firm, which services reverse mortgages through its Reverse Mortgage Solutions subsidiary, plans to shed $800 million in corporate debt through the process. Management expects Walter to emerge from Chapter 11 by the end of the first quarter of 2018.
RMS, along with fellow Walter subsidiary Ditech Financial LLC, is not part of the filing, and the company said its operations will continue as normal throughout the process.
But it does cap off a rough year for the financial services company, which first purchased RMS for $120 million in 2012 amid a major planned push into the Home Equity Conversion Mortgage space. Just about five years later, in January, Walter shut down its reverse origination business entirely, leaving RMS as a servicing entity only.
Walter also admitted that some of its financial reports were inaccurate, and received two delisting warnings from the New York Stock Exchange after shares plunged below $1 for a 30-day period and its market capitalization dropped under $50 million — both violations of the NYSE’s continued listing standards.
Walter’s stock ticker symbol, WAC, now must carry a .BC appendix, signifying “below compliance.” WAC.BC surged 42% in early trading Friday morning, rising from an opening price of $0.36 per share to $0.52.
Written by Alex SpankoPrint Article