Ditech Creditors Protest Terms of $3.8B Post-Bankruptcy Loan

Creditors of bankrupt mortgage company Ditech Holding Corp. are opposing a proposed post-bankruptcy financing deal worth up to $3.8 billion sought by the company.

The proposed debtor-in-possession, or DIP, financing agreement is a “blatant property grab from unsecured creditors” and is rife with “farcical provisions,” the official committee of unsecured creditors said in its March 19 filing opposing the deal.

Ditech filed Chapter 11 in February, its second reorganization bankruptcy case in three years. A company in Chapter 11 often obtains DIP financing—which must be approved by the bankruptcy judge—in order to continue operating and preserve its value while going ...