PMI plan of reorganization confirmed after technical issues resolved

By Jim Witters

Wilmington, Del., July 25 - PMI Group, Inc.'s plan of reorganization was confirmed after the debtor worked through some "technical issues" with the language in the final order, according to documents filed July 25 with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, judge Brendan L. Shannon said July 19 he would confirm the plan, pending resolution of issues with the U.S. Trustee's Office and the Internal Revenue Service.

The Chapter 11 plan wipes clean the debtor's balance sheet in a debtor-for-equity swap, leaving the reorganized company with $5 million in cash from two subsidiaries.

PMI says the reorganized company will seek out new business opportunities, while continuing to hold stock in its mortgage insurance subsidiary.

The mortgage insurance company is under control of the Arizona Department of Insurance and is in the midst of a seven-year rehabilitation process serving and renewing current policies, but prohibited from writing new business.

Creditor treatment

Treatment of creditors under the plan includes the following:

• Administrative expense claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Holders of secured claims will either be paid in full in cash, receive the collateral securing the claims or receive another treatment that renders the claims unimpaired;

• Holders of general unsecured claims will receive a share of creditor cash and new common stock;

• Holders of senior note claims will receive a share of creditor cash and new common stock, as well as redistribution of cash and stock from the subordinated note indenture trustee in accordance with subordination provisions;

• Any distribution of creditor cash and new common stock for holders of subordinated note claims will be redistributed to holders of senior note claims;

• Holders of convenience claims will recover 90% of their claims in cash; and

• Holders of equity interests will receive no distribution.

PMI is a Walnut Creek, Calif.-based provider of residential mortgage insurance and credit enhancement products. The company filed for bankruptcy on Nov. 23, 2011 under Chapter 11 case number 11-13730.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.