Creditors have approved the most recent bankruptcy proposal from Ditech Holding Corporation, after the company addressed concerns about its initial plan that would allow it to be sold without legal complaints.
"As an initial matter, and as a non-negotiable predicate to any settlement, the Consumer Creditors’ Committee demanded that the Plan explicitly protect consumer rights to bring claims to correct, if misstated, any accounts transferred to the Buyers as part of the Sale,” according to a statement from the Official Committee of Consumer Creditors, reported Reverse Mortgage Daily.
"This protection was essential and was supported by the Bankruptcy Court’s ruling that the Debtors cannot sell assets they do not own and that nothing in the Plan may affect consumer borrowers’ recoupment rights and other defenses."
The new plan is the result of a direct collaboration between the committee and Ditech and addresses any concerns surrounding consumer borrowers' "rights to assert recoupment and other defenses," according to the report.
"Several additional provisions have also been determined more favorable for consumers," according to RMD.
"Under the newly-amended plan, Ditech has agreed to 'reasonably investigate' and correct any alleged errors related to accounts transferred to the buyers of the servicing businesses, while the plan also 'explicitly provides' that any pre-existing consumer borrower claims against any third parties or the buyers of the servicing businesses are preserved."
To learn more about the new plan and how it protects consumer borrowers, click on the image above.