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Ditech Holding Corp. files for Chapter 11 again


For the second time in 14 months, troubled Ditech Holding Corp. has filed for bankruptcy. The nonbank, formerly known as Walter Investment Management, announced Monday morning that it was seeking to restructure its debts under Chapter 11 bankruptcy protection.

chapter11The announcement comes almost a year to the day that the Tampa, Florida,-headquartered company announced the completion of its previous financial restructuring plan and rebranding to Ditech Holding Corp. Now, Ditech seeks to eliminate more than $800 million in corporate debt. Two subsidiaries, Ditech Financial and Reverse Mortgage Solutions, are also included in bankruptcy proceedings.

Ditech plans to continue operating normally and remains “focused on providing homeowners with the right home financing solutions and the same high-quality service they have come to expect from its businesses,” according to a new release. The company could also consider a potential sale or changes to its business model.

“Since we completed a recapitalization last February, we have made important progress on our strategic initiatives and our expense management efforts,” said Thomas F. Marano, Ditech’s president and CEO. “However, as a result of market challenges that have continued to accelerate and pressure our business, we must take further action. We intend to use this process to restructure our balance sheet and help us meet our obligations.”

Signals of turmoil from the Ditech camp have persisted since financial losses led to its initial Chapter 11 filing in December 2017. In June, the nonbank cautioned investors that its board of directors was exploring “strategic alternatives” regarding the company’s future and floated the possibility of a sale. In November, it was removed from the New York Stock Exchange for its low share price and poor market capitalization — despite trading at $10 a share shortly after coming out of its first bankruptcy filing. And last month, Ditech jettisoned its chief operating officer, Ritesh Chaturbedi, after only nine months on the job.


 

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