Walter Investment Management Corp. (NYSE: WAC.BC) isn’t emerging from bankruptcy protection quite as quickly as anticipated.
The parent company of Home Equity Conversion Mortgage servicer Reverse Mortgage Solutions announced Wednesday that its prepackaged Chapter 11 restructuring plan won’t come to a close until at least Friday — despite the fact that it had estimated the process would be over by the end of January.
“The company announced today that, while it remains on track to complete the work necessary to satisfy such conditions, the Effective Date will not occur prior to February 2, 2018,” Walter said in a press release issued Wednesday morning.
It’s the first hangup in what has been an otherwise smooth restructuring process for the Fort Washington, Pa.-based financial company: After publicly floating the idea of a prepackaged Chapter 11 in the summer and fall, Walter filed in December and received approval from a federal bankruptcy judge earlier this month.
Reverse Mortgage Solutions and fellow Walter subsidiary Ditech were not included in the filing, with management indicating that operations would continue as normal during the course of the process. RMS exists only as a HECM servicing entity after Walter left the origination business in early 2017, shutting down RMS and Security One Lending’s wholesale and retail channels.
Once completed, the restructuring plan will see Walter shed $800 million in corporate debt and free up cash for investments in technology and the company’s other origination businesses.
Walter stock closed Wednesday’s trading at $0.67 per share, down 3 cents or 3.68%.
Written by Alex Spanko
