Stearns Holdings LLC has filed for bankruptcy and agreed to majority owner Blackstone Group LP's restructuring plan that will erase more than $180 million in bond debt from its balance sheet, The Wall Street Journal reported.
Stearns filed for chapter 11 protection and listed assets and liabilities that ranged from $1 billion to $10 billion in U.S. Bankruptcy Court in New York on Tuesday. The parent of the residential mortgage lender Stearns Lending LLC filed for bankruptcy as an unanticipated fall in interest rates has prompted a resurgence in home buying and mortgage refinancings.
Blackstone, whose private-equity arm purchased a majority stake in Stearns in 2015, proposed to wipe out the $184 million in outstanding bonds in exchange for a discounted cash payment to bondholders.
While Stearns said that it would consider alternative restructuring proposals to the Blackstone-backed plan, Stearns Lending intends on asking the bankruptcy court to approve numerous operational requests, which include the wages and salaries of their 2,700 employees.