AmeriFirst committee wants to handle claims against lender RCP

By Sarah Lizee

Olympia, Wash., Nov. 22 – AmeriFirst Financial, Inc.’s official committee of unsecured creditors is seeking authority to prosecute claims against lenders RCP Credit Opportunities Fund Loan SPV (Fund III), LP and RCP Customized Credit Fund (Fund IV-A), LP, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The committee said RCP schemed to elevate its debt in the company’s capital structure, assume control of the debtors and ultimately, to destroy the debtors by pushing them into liquidation.

In late 2022, the debtors were facing challenges caused by changes in the credit markets and sought to complete a restructuring with RCP.

“RCP proved to be a predator with the unwavering goal to elevate the priority of payment on its largely unsecured debt at the expense of AFI and its other stakeholders,” the committee said in the motion.

The committee said RCP, a subordinated and unsecured lender to the debtors, sought to exploit AmeriFirst’s temporary struggles, caused by an unprecedented spike in interest rate hikes, to boost its subordinated status to become the senior secured lender in full control of the business at the expense of AmeriFirst and all other stakeholders.

“Through a series of inequitable and fraudulent maneuvers, RCP used a curable default to elevate itself to senior secured status and obtained a release of substantial litigation claims against it based on fraudulent misrepresentations and in exchange for little or no benefit to AFI,” the committee said.

“It then swept (through its newly minted liens) virtually all cash to pay itself down more than $8 million and starving AFI of working capital that it needed to fund payroll and essential vendors before it ultimately took control of AFI’s stock and caused the commencement of this Chapter 11 liquidation, in which it now again dangles the strings of DIP funding to obtain yet another release from this court.”

AmeriFirst Financial is a mortgage lender based in Mesa, Ariz. The company filed bankruptcy on Aug. 24 under Chapter 11 case number 23-11240.

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