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Representative Experience > Distressed Asset Support Services

TAYLOR BEAN & WHITAKER MORTGAGE CORPORATION

Restructuring, Investment Banking, Asset Management

Company Description:

  • Taylor Bean & Whitaker Mortgage Corporation (‘TBW”) was the nation’s largest independent residential mortgage originator, headquartered in Ocala, Florida. The Company serviced $80 billion of mortgage loans and originated approximately $40 billion annually of mortgage loans.

Challenges Faced:

  • TBW was terminated as an approved servicer by Freddie Mac and Ginnie Mae and over $2 billion of TBW’s funds were frozen at Colonial Bank in connection with its seizure by the FDIC. TBW also owned various insurance companies, title companies, commercial real estate holdings, as well as Platinum Community Bank that was seized by the FDIC.

Solutions Provided by SOLIC Professionals:

  • Served as Chief Restructuring Officer and provided support personnel in connection with the Company’s Chapter 11 bankruptcy filing.
  • Coordinated and directed the administration of the Company’s Chapter 11 case, including assistance with respect to the preparation of bankruptcy schedules, statements of financial affairs and plan of reorganization or liquidation relating to the Company.

Result Highlights:

  • Oversaw the orderly disposition of approximately 4,500 foreclosed homes.
  • Post-bankruptcy, continue to serve as Liquidating Trustee and Chief Financial Officer.
  • Pursued significant litigation recoveries in order to maximize return to stakeholders including filing two of the largest accounting malpractice claims in history, as well as hundreds of avoidance actions.
  • Managed the wind-down, sale and transfer of $10 billion plus of mortgage loans.
  • Negotiated the resolution of significant governmental investigations and litigation matters.

SENTINEL MANAGEMENT GROUP, INC.

Asset Management

Company Description:

  • Sentinel Management Group, Inc. is a $1.5 billion cash management firm.

Challenges Faced:

  • Appointed by the U.S. Bankruptcy Court for the Northern District of Illinois as financial advisor to the estate reporting to the court-appointed trustee.

Solutions Provided by SOLIC Professionals:

  • Assisted the trustee and outside counsel in: (i) the operation and management of the estate; (ii) identification and collection of all electronic and hard‐copy data; (iii) performing forensic analysis of historical trading, financing and customer account activity; (iv) tracing and identification of fund assets and development of accounting; and, (v) solvency and other financial analyses in support of legal action brought by the trustee against third parties.
  • Participated in presentations of factual information and analyses to the creditors’ committees and regulators, including SEC, CFTC and NFA.
  • Submitted declarations in support of litigation and served as testifying experts in current and contemplated litigation against third parties.

Result Highlights:

  • Successfully planned and managed the orderly liquidation of the assets of Sentinel.

BAYOU FUNDS

Asset Management

Company Description:

  • Bayou Funds was a $450 million Hedge Fund.

Challenges Faced:

  • Bayou collapsed and filed for bankruptcy protections after the two founding partners revealed they had inflated profits and did not have the $450 million in assets they had represented to investors.

Solutions Provided by SOLIC Professionals:

  • Appointed by the U.S. Bankruptcy Court for the Southern District of New York as financial advisor to the estate of Bayou, reporting to the sole managing member of the estate.
  • Assisted the sole managing member in recreating the financial books and records of this failed fund, obtaining necessary hard-copy documentation, performing forensic analysis on historic fund assets, and tracing of investors’ contributions and redemptions.
  • Developed financial models which were used in valuing and determining the proper equitable reallocation of estate assets to fund investors.
  • Met regularly with the estate’s counsel, government representatives including the Federal Bureau of Investigation, and the fund’s creditors’ committee to assist the sole managing member in the appropriate wind down of the fund.

Result Highlights:

  • SOLIC professional assisted in achieving a disgorgement of certain assets from prior fund managers and investors and facilitated court settlement optimizing recoveries for defrauded investors.

SAGECREST II, LLC

Asset Management

Company Description:

  • SageCrest II, LLC (the “Fund”) was a $750 million hedge fund that focused on providing mezzanine financing to borrowers in five core areas: specialty finance, life insurance-related products, corporate, mortgage and real estate products, and specialty finance. At the time of its bankruptcy, the Fund had debt or equity interests in a wide range of financial and real estate assets including life settlements, hotels, golf courses, and commercial loans.

Challenges Faced:

  • The Fund’s loan portfolio incurred extensive losses in the wake of the 2008 financial crisis which resulted in a series of lawsuits from investors that required the Fund to seek bankruptcy protection.

Solutions Provided by SOLIC Professionals:

  • Retained by investors and appointed by the bankruptcy court to manage the Fund operating in Chapter 11.
  • Responsible for management of the fund including overall responsibility for performance improvement of operating assets (three hotels, a condo development, a golf course among others) in addition to raw land assets, a life settlement portfolio, asset-backed loans and corporate loans.

Result Highlights:

  • Post-bankruptcy, SOLIC professionals were retained as Liquidating Trustee and asset manager to run-off the remaining portfolio pursuant to an orderly liquidation plan designed by SOLIC professionals to monetize a large portfolio of disparate assets after being optimally positioned for sale to a variety of strategic and financial buyers.

HOSPITAL OF SAINT RAPHAEL

Asset Management

Company Description:

  • The Hospital of Saint Raphael (“HSR”) is a 511-bed community teaching hospital located in New Haven, CT.

Challenges Faced:

  • HSR faced declining market share, deteriorating payor mix and significant pension liabilities. As a result, its Catholic sponsor entered into an agreement to sell HSR to Yale New Haven Health System (“YNHH”). HSR closed the transaction pursuant to which YNHH acquired certain assets of HSR and assumed certain related liabilities.

Solutions Provided by SOLIC Professionals:

  • Served as financial advisor in connection with the transaction closing.
  • Served as the Wind-Down Oversight Professional to HSR’s Board of Trustees.

Result Highlights:

  • Support of pre-closing negotiations and satisfaction of closing conditions related to the sale to YNHH.
  • Assisted in the preparation, review, and implementation of a detailed wind down work plan.
  • General review and monitoring of the post-closing liquidation of the HSR’s remaining assets and liabilities including compliance with all post-closing obligations of the Asset Purchase Agreement and the orderly completion of all wind down activities.
  • Identification of key risks and considerations regarding the use of sale proceeds and retained assets for the discharge of all retained liabilities including compliance with all legal and regulatory statutes.
  • Successfully completed orderly liquidation plan.

$2 BILLION MULTI-STRATEGY HEDGE FUND

Asset Management

Company Description:

  • A Chicago based hedge fund (the “Hedge Fund”) that manages over $2 billion of assets, invests in public equity and alternative investment markets and utilizes various strategies for hedging its investments.

Challenges Faced:

  • SOLIC professionals were engaged on two separate occasions:
    • The first engagement provided litigation support in response to an involuntary Chapter 11 petition by two of its largest investors for among other things, lack of transparency and failure to honor redemption requests.
    • The Hedge Fund engaged SOLIC professionals a second time upon default of its $1.2 billion loan facility.

Solutions Provided by SOLIC Professionals:

  • Provided financial litigation support that defended the Hedge Fund’s position with an outcome that avoided a Chapter 11 bankruptcy.
  • Conducted investor road show presentations that provided updates on asset positions and fund activities.
  • Instilled credibility and confidence with the lender and investors by providing full transparency of fund activities and updated asset balances that avoided a bankruptcy or foreclosure actions.

Result Highlights:

  • Negotiated a disposition and wind-down strategy that was agreed upon by the lender and the Hedge Fund resulting in a significant recovery for the lender.

MORTGAGE LENDERS NETWORK USA, INC.

Asset Management

Company Description:

  • Mortgage Lenders Network USA, Inc. (“MLN”), based in Middleton, CT, was an originator of approximately $25 billion per year of subprime residential mortgages.

Challenges Faced:

  • As a result of the 2008 housing downturn, the Company experienced a significant increase in defaults and loss of funding sources requiring it to seek bankruptcy and an orderly liquidation.

Solutions Provided by SOLIC Professionals:

  • SOLIC professionals were retained by GMAC-RFC, the residential funding division of GMAC, to develop strategy and executed the recovery plan for in excess of $1.5 billion of warehouse loans associated with MLN and its affiliate EMAX.

Result Highlights:

  • SOLIC professionals negotiated on GMAC-RFC’s behalf a settlement agreement allowing GMAC-RFC to maximize its recovery through a Chapter 11 Plan of Liquidation resulting in a SOLIC professional serving as Liquidating Trustee. During the bankruptcy, SOLIC assisted in taking back hundreds of millions worth of underlying mortgage loans pledged as collateral which were then sold through bundled secondary market trades, optimizing recovery for the stakeholders.

OCALA FUNDING, LLC

Asset Management

Company Description:

  • Ocala Funding, LLC was a 100% wholly owned bankruptcy remote subsidiary of Taylor, Bean & Whitaker Mortgage Corp. (“TBW”), the largest independent mortgage originator in U.S. originating $40 billion of residential mortgages annually. Ocala Funding was created as a special purpose entity of TBW to issue commercial paper to the some of the world’s largest financial institutions to purchase mortgage loans originated by TBW.

Challenges Faced:

  • In August 2009, TBW was seized by the FBI for a massive fraud that, among other things, diverted billions of dollars from Ocala Funding. As a result, Ocala Funding’s creditors were left with substantial shortfalls in collateral to secure its $1.75 billion commercial paper facility.

Solutions Provided by SOLIC Professionals:

  • In conjunction with Ocala Funding’s filing for Chapter 11 bankruptcy protection, SOLIC professionals were retained to serve as Chief Restructuring Officer and associated support staff in order manage the debtor and oversee the wind-down and liquidation process. During the course of the engagement, SOLIC professionals:
    • Provided strategic oversight, back office administration, and litigation support for recovery of Ocala Funding’s assets.
    • Facilitated and coordinated strategic discussions amongst a large group of stakeholders, which include major financial institutions and government entities.
    • Facilitated the oversight and monitoring of $45 million loan portfolio for the benefit of the secured lenders.
    • Received court approval for Chapter 11 liquidation plan pursuant to which a SOLIC professional is currently serving as Litigation/Liquidating Trustee.

Result Highlights:

  • SOLIC professionals developed and implemented alternative recovery plans based on creative litigation strategies including the prosecution of one of the largest accounting malpractice actions in U.S. history, as well as pursuit of over $1 billion in avoidance actions, resulting in significant recoveries for the estate.

BMJ Medical Management Inc.

Restructuring, Asset Management

Company Description:

  • BMJ Medical Management Inc. (NASDAQ: BONS) was one of the leading operators of ambulatory surgery centers, magnetic resonance imaging centers, physical therapy clinics, and musculoskeletal physician practices with annualized revenues of approximately $150 million, senior secured debt of $44 million, preferred stock investments of $7 million and public equity of $50 million.

Challenges Faced:

  • The Company’s capital structure was overleveraged and its business model faced significant litigation pressure from multiple stakeholders.

Solutions Provided by SOLIC Professionals:

  • Initially retained by the Board of Directors of BMJ (comprised primarily of equity sponsor representatives) to oversee BMJ’s restructuring efforts.
  • SOLIC professional appointed President and directed an orderly liquidation of BMJ’s operations in Chapter 11 pursuant to which over 30 separate business units were divested, 100% of the senior secured principal obligations were paid, and significant distributions were made to unsecured creditors and equity holders.

Result Highlights:

  • Developed and executed significant alternative recovery strategies involving numerous adversary proceedings based upon fraudulent conveyance analysis and other litigation support provided by SOLIC professionals.
  • Designed and implemented strategy of orderly liquidation, executing 30 separate settlement transactions among physician groups and ambulatory surgery centers.

Representative experience includes transactions led by SOLIC professionals at predecessor firms