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Docket 3237 TBW Freddie Mac Settlement Agreement

Docket 3237 TBW Freddie Mac Settlement Agreement

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Published by stacyvan
Freddie Mac settles for $53M with TBW Unsecured Creditors
Freddie Mac settles for $53M with TBW Unsecured Creditors

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Categories:Types, Research, Law
Published by: stacyvan on Jun 28, 2011
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12/08/2013

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DM3\1798810.2
 
IN
 
THE
 
UNITED
 
STATES
 
BANKRUPTCY
 
COURTMIDDLE
 
DISTRICT
 
OF
 
FLORIDAJACKSONVILLE
 
DIVISIONIn re:TAYLOR,
 
BEAN
 
&
 
WHITAKER
 
MORTGAGE
 
CORP.Debtor.Chapter 11Case No. 3:09-BK-07047-JAFMOTION TO APPROVE SETTLEMENT AGREEMENT BY ANDAMONG TAYLOR, BEAN & WHITAKER MORTGAGE CORP.,FEDERAL HOME LOAN MORTGAGE CORPORATION AND THEOFFICIAL COMMITTEE OF UNSECURED CREDITORS
Taylor, Bean & Whitaker Mortgage Corp., debtor and debtor in possession herein(“TBW” or “Debtor”), pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure (the“Bankruptcy Rules”), hereby files this motion (“Motion”) to approve a settlement as to certainclaims and potential causes of action by and among the Debtor, Federal Home Loan MortgageCorporation (“Freddie Mac”), and the Official Committee of Unsecured Creditors of the Debtor(“Committee”; the Debtor, Freddie Mac, and the Committee are collectively referred tohereinafter as the “Parties”), and in support of the Motion, the Debtor respectfully represents asfollows:Jurisdiction1.
 
This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. §§ 157and 1334. The subject matter of this Motion is a core proceeding pursuant to 28 U.S.C. § 157(b).Venue is proper in this district pursuant to 28 U.S.C. § 1408.
Case 3:09-bk-07047-JAF Doc 3237 Filed 06/22/11 Page 1 of 9
 
- 2 -
DM3\1798810.2
 Background2.
 
On August 24, 2009 (“Petition Date”), the Debtor filed with this Court itsvoluntary petition for relief under chapter 11 of title 11 of the United States Code (the“Bankruptcy Code”).3.
 
The Debtor continues to operate its business and manage its property as a debtorin possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.4.
 
On September 11, 2009, the Office of the United States Trustee appointed theCommittee.5.
 
No trustee or examiner has been appointed in this case.6.
 
On November 12, 2010, the Debtor and the Committee, as Co-Proponents, filedthe Second Amended and Restated Joint Plan of Liquidation of the Debtors and the OfficialCommittee of Unsecured Creditors (the “Plan”), along with the Second Amended and RestatedDisclosure Statement, which was approved pursuant to the Order Approving Second Amendedand Restated Disclosure Statement, Scheduling Confirmation Hearing, and Fixing Time forFiling Acceptances or Rejection of Second Amended and Restated Joint Plan of Liquidationentered on November 23, 2010. [Docket No. 2200].7.
 
Prior to the Petition Date, TBW was a seller and servicer of mortgages pursuant tovarious written agreements between TBW and Freddie Mac, which incorporate Freddie Mac’spublished “Single-Family Seller/Servicer Guide” (“the Guide”). In the course of thisrelationship:a.
 
TBW sold mortgages to Freddie Mac;b.
 
TBW acted as servicer for approximately 291,000 mortgagesowned or guaranteed by Freddie Mac as of August 2009;c.
 
TBW collected mortgage payments, loan pay-offs and othermonies related to the mortgages serviced for Freddie Mac and
Case 3:09-bk-07047-JAF Doc 3237 Filed 06/22/11 Page 2 of 9
 
- 3 -
DM3\1798810.2
 remitted monies to Freddie Mac (and others) in connection withthese mortgages; and,d.
 
TBW repurchased from Freddie Mac mortgages that weredetermined not to be in compliance with the controllingagreements and the Guide.8.
 
On September 6, 2008, the Director of the Federal Housing Finance Agency(“FHFA”) placed Freddie Mac into conservatorship pursuant to the Housing and EconomicRecovery Act of 2008 (“HERA”). TBW continued to act as seller and servicer for Freddie Macin conservatorship.9.
 
On August 3, 2009, federal law enforcement agencies simultaneously executedsearch warrants at the Debtor’s Ocala, Florida headquarters and at the Orlando, Florida offices of Colonial Bank, Montgomery, Alabama, N.A. (“Colonial Bank”).10.
 
On August 4, 2009, TBW was notified that its authority to originate, sell orservice mortgages was immediately suspended and/or terminated by the United StatesDepartment of Housing and Urban Development and the Government National MortgageAssociation. On the same day, Freddie Mac provided written notice to TBW of termination of TBW’s eligibility to sell mortgages to and service mortgages for Freddie Mac.11.
 
On August 5, 2009, Colonial Bank placed an administrative hold on all of TBW’saccounts. On August 11, 2009, the Federal Deposit Insurance Corporation (“FDIC”) issued atemporary order to Colonial Bank directing it to first seek approval from the Regional Directorbefore engaging in any transaction with the Debtor, its affiliates, or related entities. By orderdated August 14, 2009, the Alabama State Banking Department closed Colonial Bank andappointed the Federal Deposit Insurance Corporation, as Receiver of Colonial Bank,Montgomery, Alabama (“FDIC-R”).12.
 
TBW filed its voluntary chapter 11 petition on August 24, 2009 (the “Petition”).
Case 3:09-bk-07047-JAF Doc 3237 Filed 06/22/11 Page 3 of 9

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