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Representative Experience > Distressed Asset Support Services

TAYLOR BEAN & WHITAKER MORTGAGE CORPORATION

Restructuring, Investment Banking, Distressed Asset Support Services

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.

Distressed Asset Support Services

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

Distressed Asset Support Services

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

Distressed Asset Support Services

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.

Memorial University Medical Center

Distressed Asset Support Services

Company Description:

  • Memorial Health, Inc. (the “Hospital”) operates as a level 1 trauma, acute care academic medical center affiliated with Mercer University School of Medicine. Located in Savannah, Georgia, the Hospital is organized as a private 501(c)3 non-profit corporation and leased the associated real property from the Chatham County Healthcare Authority.

Engagement Objectives:

  • SOLIC professionals were retained jointly by the Hospital Board of Directors and the Chatham County Healthcare Authority to assist in the closing of the sale of assets of the Hospital to an affiliate of Healthcare Corporation of America in exchange for total cash consideration of approximately $450 million.

Solutions Provided by SOLIC Professionals:

  • Developed a comprehensive wind-down plan for all assets and liabilities excluded from the sale transaction
  • Assisted the Hospital in negotiating key elements of the Transition Services Agreement
  • Currently serving as Chief Executive Officer / Chief Wind-Down Officer and Chief Financial Officer and are oversighting the wind-down of all remaining assets and liabilities
  • Developed detailed wind-down budgets and plans in advance of the transaction closing in order to size escrow holdback amounts necessary to run-off retained asset and liabilities
  • Currently oversighting the run-off of all remaining assets including: $100 MM of accounts receivable, ownership interests in various outpatient facilities
  • In charge of the run-off of all corporate liabilities including debt, pre-closing unassumed contracts, malpractice liabilities and other retained liabilities

Result Highlights:

  • Post-closing, SOLIC professionals are serving as Chief Executive Officer/Chief Wind-Down Officer and Chief Financial Officer of Memorial Health, Inc. and are charged with collecting all of the Hospital’s accounts receivable, monetizing various ancillary services that were retained post-closing, and running off the excluded liabilities, such as significant malpractice and other healthcare liability claims.

Mission Health

Distressed Asset Support Services

Company Description:

  • Mission Health is a $2 billion, 13,000 employee health system based in Asheville, North Carolina and includes a 770-bed teaching hospital, six regional hospitals, multiple ambulatory care facilities, an 800-plus provider group practice, a $100-plus million post-acute provider, a health plan and related services.

Engagement Objectives:

  • SOLIC was retained as financial Advisor to provide transition planning and wind-down oversight in connection with Mission Health’s sale to Hospital Corporation of America (HCA).

Result Highlights:

  • Developed a comprehensive wind-down plan for all assets and liabilities excluded from the sale transaction
  • Assisted the Hospital in negotiating key elements of the Transition Services Agreement
  • Currently serving as Chief Executive Officer / Chief Wind-Down Officer and Chief Financial Officer and are oversighting the wind-down of all remaining assets and liabilities
  • Currently oversighting the transition of over $1.4 billion in sale proceeds to the Dogwood Health Trust

MORTGAGE LENDERS NETWORK USA, INC.

Distressed Asset Support Services

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

Distressed Asset Support Services

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, Distressed Asset Support Services

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