The Atlanta-based lender is asking a federal bankruptcy court to extend by four months its exclusive right to propose a plan through April 7, 2008.
In a filing Wednesday with the U.S. Bankruptcy Court in Wilmington, Del., HomeBanc said that it has "communicated regularly" with its major creditor constituencies regarding the sale process and other potential means for maximizing value for its creditors.
An exclusivity extension is, however, necessary to allow the sale of the servicing business and other assets to close, and time for talks on plan terms, the liquidating lender said.
The sale of the company's servicing business to The deal, which calls for ., a Bear Stearns affiliate, is set to close Dec. 3. EMC to pay about $60 million to take over the servicing of about $7 billion worth of home loans, was approved by Judge Kevin Carey on Nov. 1.
The company is also seeking to extend its exclusive right to solicit creditor support for a plan through June 4, 2008. The company's exclusive solicitation period is currently set to expire Feb. 5, 2008.
Companies operating under Chapter 11 protection must submit to the court a plan outlining how they will repay creditors. Exclusive periods prevent other parties from filing competing plans, enabling the company to retain control of its reorganization process.
Since entering Chapter 11 protection in August, HomeBanc has closed about 20 satellite office locations, sold various assets, and taken other steps to wind-down its businesses.
A hearing on HomeBanc's request for an extension of its exclusivity periods is set for Nov. 27. At the same time, the court will consider a request by the company for permission to sell several pools of mortgage loans, with an unpaid principal balance of about $10 million, and the servicing rights to the loans.
HomeBanc Mortgage filed for Chapter 11 protection in August and promptly laid off more than 900 employees. Bear Stearns pays $60 million to take over the servicing of about $7 billion worth of home loans? What a great investment! With BS and EMC's MSF expertise in stealing homes, it ought to make a tidy return. This is sure to be one Christmas present no one wants or needs!