Reverse Mortgage gets conditional approval of disclosure statement

By Sarah Lizee

Olympia, Wash., March 22 – Reverse Mortgage Investment Trust Inc. received conditional approval of the disclosure statement for its Chapter 11 plan of liquidation, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The combined hearing on final approval of the disclosure statement and confirmation of the plan is scheduled for April 27.

The voting deadline is 4 p.m. ET on April 20.

As previously reported, the company said the plan is currently supported by the official committee of unsecured creditors, parent company BNGL Holdings and Nomura.

The plan provides for payment in full of allowed administrative claims, other secured claims, priority tax claims and other priority claims.

Holders of DIP secured claims will receive payment in full in cash. Under an agreement to receive less favorable treatment under a 9019 settlement, BNGL will receive half of the unencumbered asset proceeds, any remaining professional fee reserve amount after professional fees are paid, and half of any cash held by the wind-down debtors when the cases close, after payment in full of all operating expenses.

BNGL won’t receive anything on behalf of its secured note claims, except as otherwise provided in the 9019 settlement.

The holders of the Barclays warehouse repo facility claims, the Nomura claims, the TCB claims and the TIAA warehouse repo facility claims will receive payment in full in cash, delivery of the collateral securing any secured portion of the claims and payment of any interest required by bankruptcy code, or other treatment that renders the claims unimpaired.

To the extent the allowed amount of the above claims are not secured, the holders will receive their pro rata share of the general unsecured creditor reserve. The GUC reserve will be funded on the effective date, with 50% of unencumbered asset proceeds, and, after the final decree is entered closing these Chapter 11 cases, or at another date to be determined by the debtor or plan administrator, 50% of the wind-down account.

Holders of CS claims will receive payment in full in cash for the secured portion of the claim; delivery of the collateral, including risk retention bonds, securing any secured portion of the claims and payment of any interest required by bankruptcy code; or other treatment rendering the claims unimpaired. To the extent the claims are unsecured, holders will receive a pro rata share of the GUC reserve.

Holders of $213.9 million to $226.6 million of general unsecured claims will receive their pro rata share of the GUC reserve. This is expected to lead to a 2.7% to 6.1% recovery.

Holders of intercompany claims and interests will receive no distribution.

RMIT equity interests will be canceled. Holders may receive their share of any remaining assets of RMIT in the event that all allowed claims have been satisfied in full.

The Bloomfield, N.J.-based reverse mortgage issuer filed Chapter 11 bankruptcy on Nov. 30 under case number 22-11225.

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