First Guaranty Reaches Deal with Creditors on Bankruptcy Plan

First Guaranty Mortgage Corp. reached a deal with an unsecured creditors’ committee that removes the group’s opposition to the mortgage lender’s Chapter 11 plan and litigation releases for owner Pacific Investment Management Co.

The deal, which is not yet documented, allows First Guaranty to inch closer toward successfully liquidating under its own terms., The proposal was described in brief detail during a hearing Thursday in the US Bankruptcy Court for the District of Delaware.

Under the proposed agreement, general unsecured creditors would share in a split of proceeds from the liquidation of First Guaranty with an indirect subsidiary of Pimco ...