Consumer Class Wants Rights Retained in Ditech’s Bankruptcy Sale

Consumers suing bankrupt Ditech Holding Corp. are objecting to the mortgage servicer’s plan to sell its assets, asserting that the deal could wipe out some of their claims.

Their objections, filed with the U.S. Bankruptcy Court for the Southern District of New York July 18, said Ditech’s proposed asset sale to New Residential Investment Corp. is touted as a “free and clear” transaction. But the deal would give New Residential the right to terminate certain consumer claims, according to the consumers who have filed a $25.5 million class action against Ditech.

The consumer class, who were certified by the U.S. ...