Ditech Holding Corp., which is currently going through Chapter 11 bankruptcy for the second time in just over a year, is closing its St. Paul, Minnesota office and laying off more than 200 employees.
Back in February, the nonbank formerly known as Walter Investment Management declared bankruptcy for the second time in 14 months as the company seeks to further reduce its debt.
In 2018, the company emerged from Chapter 11 bankruptcy for the first time, after completing a financial restructuring plan that eliminated $800 million in corporate debt, and changed its name to Ditech Holding.
But earlier this year, the company announced that it, along with its subsidiaries Ditech Financial and Reverse Mortgage Solutions, had entered into a “restructuring support agreement” that will seek to eliminate $800 million more in debt.
Those proceedings are still ongoing, but the company recently notified Minnesota state officials that it is closing its facility in St. Paul on or before May 31, 2019. The St. Paul location was part of Ditech’s mortgage servicing operations.
As part of that office closing, Ditech is laying off a total of 210 employees.
According to the WARN notice filed with the Minnesota Department of Employment and Economic Development, the company said that last year it decided to consolidate its servicing operations to locations that did not include St. Paul, but said that it no plans to close the St. Paul location.
According to a 2018 filing with the Securities and Exchange Commission, Ditech also had servicing facilities in Tempe, Arizona; Rapid City, South Dakota; and Jacksonville, Florida, although the South Dakota location was also shuttered last year.
And now, the company is closing the St. Paul location too.
According to the WARN notice, approximately 65 of the employees at the St. Paul location will remain in their current position and be allowed to work from home. Additionally, the notice states that while the job losses and facility closure are permanent, impacted employees will be allowed to apply for open positions with the company at other locations.
The WARN notice additionally states that the layoffs actually began in March 2018 and are “expected to continue throughout 2019.”
The layoffs are the latest in a string of bad news for the company.
It began with a long string of financial losses for the company, which also basically had a revolving door in its CEO’s office for several years.
Then, the company declared bankruptcy and emerged, seemingly on solid footing.
But that wasn’t enough to stem the tide. In June 2018, Ditech warned investors that it was exploring “strategic alternatives to enhance stockholder value,” which included possibly selling the company.
Then, in November, the nonbank ran into more trouble when it was kicked off of the New York Stock Exchange over to the company’s low share price and market cap.
And then, earlier this year, the company fired its chief operating officer, Ritesh Chaturbedi, who’d only been with the company for nine months.
And now, Ditech is laying off more than 200 people.
The layoffs were first reported by TwinCities.com.
