Chapter 11 Cases of Stearns Holdings, LLC and Affiliates
7/17/2019

Davis Polk is advising a leading financial institution, in its capacity as counterparty under a pre-petition master repurchase agreement, master securities forward transaction agreement and certain other agreements, in the ongoing chapter 11 cases of Stearns Holdings, LLC and its debtor affiliates (“Stearns”). Stearns sought chapter 11 relief before Judge Shelley C. Chapman in the United States Bankruptcy Court for the Southern District of New York on July 9, 2019. At the first day hearing, Judge Chapman authorized Stearns to enter into a new $1.5 billion repurchase facility, the proceeds of which were used to repay the leading financial institution’s prepetition repurchase and forward claims in full.

Stearns is a leading mortgage originator headquartered in Santa Ana, California. Stearns sells approximately 80-85% of its loans to Fannie Mae, Freddie Mac or Ginnie Mae. The remainder of the loans are sold to loan aggregators and other investors.

 The Davis Polk restructuring team included partner Damian S. Schaible, counsel Natasha Tsiouris, Erika D. White, and Jon Finelli, and associates Thomas S. Green and Daniel E. Meyer. All members of the Davis Polk team are based in the New York office.