Page 4 of 7 – SEC Filing
| CUSIP No. 93317W102 | 13D | Page 4 of 7 Pages |
Item 4. Purpose of Transaction.
On November 30, 2017, Walter Investment Management Corp. filed a voluntary petition under chapter 11 of title 11 of the United States Code (the “Bankruptcy 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. On January 17, 2018, the Court approved the Amended Prepackaged Chapter 11 Plan of Walter Investment Management Corp. and the Affiliate Co-Plan Proponents (the “Plan”), and on January 18, 2018, entered an order confirming such approval.
On February 9, 2018 (the “Effective Date”), the Plan became effective pursuant to its terms and the actions contemplated therein were consummated.
On the Effective Date, Walter Investment Management Corp. changed its name to Ditech Holdings Corporation.
On the Effective Date, pursuant to the Plan, holders of Walter Investment Management Corp.’s 7.875% Senior Notes due 2021 (the “Senior Notes”) before the Effective Date, exchanged the Senior Notes for New Second Lien Notes (as defined herein) and Mandatorily Convertible Preferred Stock (as defined herein) at a rate of 464.11293167 of the Issuer’s new 9.00% Second Lien Senior Subordinated PIK Toggle Notes due 2024 (the “New Second Lien Notes”) and 0.18564517 shares of the Mandatorily Convertible Preferred Stock, par value $0.01 per share (the “Mandatorily Convertible Preferred Stock”), per $1,000 principal amount of Senior Notes. The New Second Lien Notes will mature on December 31, 2024. Interest on the New Second Lien Notes will accrue at a rate of 9.00% per annum payable semi-annually in arrears on June 15 and December 15 of each year. The aggregate number of shares of Common Stock issuable by the Issuer for each share of Mandatorily Convertible Stock shall be the product of (a) the aggregate number of shares of Mandatorily Convertible Preferred Stock being converted multiplied by 114.9750, the conversion multiple, which is subject to adjustment. The Mandatorily Convertible Preferred Stock may be converted into shares of New Common Stock (i) at the election of the holder thereof after the Effective Date and (ii) as a class in its entirety, in whole but not in part, at any time after the Effective Date, at the option of the holders of 66 2/3 % of the Mandatorily Convertible Preferred Stock then outstanding. The Mandatorily Convertible Preferred Stock, as a class in its entirety, shall be mandatorily convertible at the earliest of (i) February 9, 2023, (ii) at any time following one year after the Effective Date, the time that the volume weighted average pricing of the Common Stock exceeds 150% of the conversion price per share for at least 45 trading days in a 60 consecutive trading day period, including each of the last 20 days in such 60 consecutive trading day period, and (iii) a change of control transaction in which the consideration paid or payable per share of Common Stock is greater than or equal to $8.6975.
On the Effective Date, pursuant to the Plan, holders of Walter Investment Management Corp.’s 4.50% Convertible Senior Subordinated Notes due 2019 (the “Convertible Notes”) before the Effective Date, exchanged the Convertible Notes for Common Stock, Series A Warrants and Series B Warrants at a rate of 8.76919731 shares of Common Stock, 14.94011581 Series A Warrants and 11.85465711 Series B Warrants per $1,000 principal amount of Convertible Notes. Each Series A Warrant is exercisable for one share of Common Stock on a cash or cashless basis at an exercise price of $20.63 per share. Each Series B Warrant is exercisable for one share of Common Stock on a cash or cashless basis at an exercise price of $28.25 per share. All unexercised warrants shall expire on the 10th anniversary of the Effective Date.
On the Effective Date, pursuant to the Plan, holders of existing shares of Walter Investment Management Corp.’s common stock (the “Old Common Stock”) before the Effective Date, exchanged the Old Common Stock at a rate of 0.05689208 shares of Common Stock, 0.09692659 Series A Warrants and 0.07690920 Series B Warrants per share of existing Old Common Stock.
On the Effective Date, pursuant to the Plan, Mr. Cooperman, received 140,647 shares of Common Stock, 26,058 shares of Mandatorily Convertible Preferred Stock, 239,622 Series A Warrants and 190,134 Series B Warrants. These securities were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933 contained in Section 1145(a) of the Bankruptcy Code.
On the Effective Date and pursuant to the Plan, the Issuer entered into a registration rights agreement (the “Registration Rights Agreement”) with certain parties (the “Holders”), including Capital LP, Investors LP, Equity LP, Overseas and Credit LP, that received shares of the Issuer’s Common Stock, Series A Warrants, Series B Warrants and Mandatorily Convertible Preferred Stock. The Registration Rights Agreement provides the Holders with registration rights of the Holders’ Registrable Securities (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuer agreed to file, within 60 days of the receipt of a request by the Holders of at least 40% of the Registrable Securities, an initial shelf registration statement covering resales of the Registrable Securities held by the Holders. Subject to limited exceptions, the Issuer is required to maintain the effectiveness of any such registration statement until the earlier of (i) three years following the Effective Date and (ii) the date that all Registrable Securities covered by the shelf registration statement are no longer Registrable Securities. In addition, the Holders beneficially holding 10% or more of the Common Stock have the right to demand that the Issuer effect the registration of any or all of the Registrable Securities and/or effectuate the distribution of any or all of their Registrable Securities by means of an underwritten shelf takedown offering.
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