Impac Mortgage: Court Confirms $23.95M Hildene Debt-for-Equity Plan

The U.S. Bankruptcy Court for the District of Delaware entered findings of fact, conclusions of law, and an order confirming the joint prepackaged chapter 11 plan of Impac Mortgage Holdings, Inc. and eleven affiliated debtors (Case No. 26-10593) on May 29, 2026, one day after a combined hearing before the Hon. Craig T. Goldblatt. The order approved the disclosure statement as containing adequate information and confirmed the plan 33 days after the April 26, 2026 petition date — inside the Restructuring Support Agreement's 45-day confirmation milestone.

Plan sponsor Hildene Re SPC, Ltd. converts its $23,950,000 in senior secured claims into 100% of the reorganized company's Plan Sponsor Common Stock, refinances debtor-in-possession obligations through an Exit Loan Facility, and replaces the board with three Hildene-designated directors. Existing Impac equity is cancelled. Holders of approximately $76.354 million in Junior Subordinated Notes accepted unanimously and receive a Contingent Payment Certificate floored at $250,000 and capped at $5,000,000. The plan preserves at least $850 million in federal and $600 million in California net operating loss carryforwards, protected through interim and final NOL preservation orders and the section 1146(a) and 1145 exemptions in the confirmation order.

Debtor(s)	Impac Mortgage Holdings, Inc. (12 jointly administered entities)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	26-10593
Judge	Hon. Craig T. Goldblatt
Petition Date	April 26, 2026
Confirmation Date	May 29, 2026
Plan Type	Joint Prepackaged Chapter 11 Plan of Reorganization
Plan Sponsor	Hildene Re SPC, Ltd.
DIP Facility	$5 million term loan from Hildene (includes $2 million bridge note roll-up), 12% interest, 90-day maturity
Claims Agent	Kurtzman Carson Consultants dba Verita Global

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Combined Hearing and Confirmation Order

Judge Goldblatt held the combined disclosure statement and confirmation hearing on May 28, 2026 at 2:00 p.m. ET and signed the confirmation order the following day. The Debtors filed the operative memorandum of law in support of confirmation and supporting declarations on May 26, 2026.

Section 1129 findings. The court found the plan satisfies each applicable subsection of section 1129, including (a)(1) Bankruptcy Code compliance, (a)(2) debtor compliance, (a)(3) good-faith proposal, (a)(7) best interests of creditors, (a)(10) at least one impaired accepting class, (a)(11) feasibility, and (b) cramdown over the deemed-rejecting classes. The court also confirmed that the section 1125 and 1126 solicitation procedures had been satisfied and the disclosure statement contained adequate information.

No formal objections. The Debtors received no formal objections by the objection deadline. They resolved informal comments from the U.S. Trustee, the Securities and Exchange Commission, the Department of Justice, Enterprise Bank & Trust, and the Debtors' Newport Beach landlord Newport Gateway Office LLC by incorporating clarifying language directly into the confirmation order. Those clarifications include the scope of releases, exculpation, and the discharge of governmental claims; confirmation that equity issuances are not made pursuant to section 1145 except as expressly provided; and a Governmental Bar Date of October 23, 2026.

Effective Date. The plan and plan documents become binding subject to occurrence of the Effective Date. The RSA targets an Effective Date no later than 60 days after the petition date, or on or about June 25, 2026, though the confirmation order does not fix a calendar date. Administrative claims must be filed by the first business day that is the 30th day after the Effective Date.

Voting Tabulation and Class Acceptance

Both impaired voting classes accepted the plan unanimously. Kurtzman Carson Consultants dba Verita Global certified the tabulation in a declaration filed May 26, 2026 by Adam J. Gorman. Solicitation closed at 10:00 p.m. ET on Sunday, April 26, 2026, against a voting record date of April 22, 2026.

Class	Designation	Ballots Accepting	Ballots Rejecting	Amount Accepting	Acceptance Rate
3	Senior Indebtedness Claims	1	0	$23,950,000.00	100% / 100%
4	Subordinated Noteholder Claims	2	0	$62,000,000.00	100% / 100%

Class 5 (General Unsecured Claims), Class 6 (Intercompany Claims), Class 7 (510(b) Claims), and Class 8(a) (Interests in Impac) are deemed to have rejected and were bound through section 1129(b) cramdown. Class 4 ballot amounts of $62 million reflect the Junior Subordinated Notes voted by Taberna Preferred Funding 1 LTD and Taberna Preferred Funding 2 LTD, the consenting subordinated noteholders under the Restructuring Support Agreement.

From Mortgage REIT to Mortgage Broker

Impac was formed in 1995 as a real estate investment trust and operated as a nationwide independent residential mortgage lender headquartered in Irvine, California. Following the 2007 subprime crisis, Impac revoked its REIT status and converted to a C-corporation. As of 2020, operations spanned mortgage lending, long-term portfolio investments, and servicing and master servicing.

The COVID-19 pandemic disrupted operations in 2020, temporarily halting loan originations and requiring staff furloughs. By Q1 2023 the Debtors had wound down wholesale lending and mortgage servicing operations and repositioned as a mortgage broker. As of the petition date, the Debtors employed eighteen full-time staff members. George A. Mangiaracina serves as Chief Executive Officer, President, and Chairman of the Board.

GSE Breakdown, Rising Rates, and the 2025 Liquidity Wall

The First Day Declaration attributes the distress to a sequence of operational and financial pressures. A 2015 acquisition of CashCall Mortgage resulted in high prepayment speeds that damaged the relationship with Fannie Mae. In July 2020, Freddie Mac suspended the Debtors' ability to sell loans directly, forcing the company to route through aggregators, compressing margins and slowing origination cycles. Protracted litigation regarding a 2009 exchange offer was not adjudicated until early 2023, impairing the Debtors' ability to raise equity or capital and causing lost merger and acquisition opportunities. Rising interest rates between 2021 and 2023 drove up payments on the floating-rate Junior Subordinated Notes, and the Debtors were unable to hedge against those rate increases.

To address liquidity challenges, the Debtors ran a multi-year asset disposition program. They sold $4.2 billion in unpaid principal balance of Freddie Mac mortgage servicing rights in 2020; sold residual interests in March 2022 for $37.5 million, reducing assets and liabilities by approximately $1.6 billion each; sold Ginnie Mae MSRs of approximately $68 million UPB in December 2022 for approximately $725,000; and paid $3 million in January 2023 to terminate a lease with $8.8 million in remaining commitment. The Debtors also paid off Convertible Promissory Notes (originally $25 million in 2013, reduced to roughly $10 million by 2023) in full in December 2024 using Employee Retention Tax Credit proceeds.

By 2023 the Debtors had minimal liquidity and were unable to satisfy operating costs. Despite securing a $20 million prepetition loan from Hildene, the facility was fully drawn by July 2025. In January 2026, the Debtors secured a limited $2 million working capital bridge note from Hildene. On April 22, 2026, the Debtors entered into the Restructuring Support Agreement to facilitate the prepackaged chapter 11 filing.

Prepetition Capital Structure and NOL Carryforwards

The prepetition capital structure layered three tranches of secured debt over an unsecured junior subordinated stack.

Prepetition Bridge Note. Hildene Re SPC, Ltd. (as successor-by-assignment to Trinity Park Investments, LLC) held $2 million in outstanding principal at 12% per annum interest, maturing the earlier of January 26, 2027 or satisfaction via DIP financing. The bridge note provided short-term working capital while the RSA was negotiated.

Prepetition Loan (Senior Indebtedness). Hildene provided a $20 million senior secured facility at SOFR plus 7.5%, compounded quarterly, secured by substantially all assets of the Debtors. As of the petition date, at least $23,950,000 was outstanding including accrued interest and fees.

Enterprise Bank & Trust Loans. Approximately $16.4 million was outstanding under three amended and restated promissory notes dated April 30, 2023, with a maturity date of April 30, 2026 — four days after the petition date. Accrued interest is rolled into principal quarterly. The loans are secured by a collateral assignment of three life insurance policies issued by Allianz Life Insurance Company of North America, with an estimated cash surrender value of approximately $15 million, plus cash collateral held in restricted EB&T pledged accounts. Enterprise may require increased cash collateral based on the difference between the loan balance and the policies' cash surrender value. The pledged accounts also secure an irrevocable standby letter of credit supporting surety bonds issued by Liberty Mutual Insurance Company.

Junior Subordinated Notes. Approximately $76.354 million in interest-only Junior Subordinated Notes were issued on May 8, 2009, following the exchange of trust preferred securities. The Debtors originally issued four series of trust preferred securities in 2005, subsequently retired or exchanged between 2008 and 2017, including a 2009 exchange of $51.3 million of trust preferred securities for $62 million in subordinated notes. The notes were subject to a Forbearance Agreement with HCMC III, LLC, amended to terminate on June 1, 2026.

General unsecured claims. Approximately $1 million in total unsecured debt, comprising disputed, unliquidated, or contingent claims from vendors and cost report payables. The Debtors also estimate a legacy repurchase and indemnification liability allowance of approximately $3.06 million relating to historical mortgage lending obligations, though they believe actual exposure is nominal — none of their ten largest historical counterparties currently have outstanding repurchase demands.

Tax assets. The Debtors hold at least $850 million in federal NOL carryforwards and at least $600 million in California NOL carryforwards as of December 31, 2025. The court entered an interim NOL preservation order on April 27, 2026 establishing notice procedures and restrictions on equity transfers and worthlessness declarations that could reduce or eliminate the Debtors' ability to use the NOLs. Transfers violating the procedures are void ab initio.

DIP Financing, Hildene Bridge Roll-Up, and the Exit Loan Facility

The Debtors obtained a $5 million senior secured super-priority DIP term loan from Hildene Re SPC, Ltd. The facility includes a $2 million dollar-for-dollar roll-up of the Prepetition Bridge Note obligations upon entry of the interim order, plus an initial $1.5 million term loan draw. The DIP bears interest at 12% per annum, with a default rate of the non-default rate plus the lesser of 3% or the maximum permitted by law. The facility is non-revolving and governed by New York law.

Security covers substantially all of the Debtors' assets, and upon entry of the final order extends to net cash proceeds from avoidance actions, subject to a carve-out for U.S. Trustee fees and unpaid professional fees allowed under the 13-week budget certified by the Chief Restructuring Officer. The prepetition lender consented to priming of its prepetition liens.

The DIP matures at the earliest of 90 days post-petition, the plan effective date, an alternative plan filing, conversion to chapter 7, dismissal, or acceleration. Case milestones required that all first day motions, the combined plan and disclosure statement, and the prepack scheduling order be filed by the petition date. Events of default include failure to meet milestones and cross-default under the RSA.

Exit Loan Facility. Upon the Effective Date, the reorganized debtors will enter into an Exit Loan Facility with Hildene. The facility refinances DIP obligations and provides $5 million in new money at SOFR plus 4% per annum, with a default rate of an additional 3% and a 36-month maturity. The exit loan is secured by a first priority lien on all assets of the reorganized debtors. The confirmation order found that Hildene extended the exit financing in good faith for legitimate business purposes and for reasonably equivalent value, and protected it from avoidance, recharacterization, or subordination.

Hildene RSA and Plan Class Treatment

The plan was negotiated under the RSA dated April 22, 2026 among the Debtors, Hildene (as Plan Sponsor and DIP Lender), and Taberna Preferred Funding 1 LTD and Taberna Preferred Funding 2 LTD as beneficial holders of the Junior Subordinated Notes. The RSA set milestones requiring entry of final orders within 30 days of the petition date, plan confirmation within 45 days, and the Effective Date within 60 days. A breakup fee of 3% of the value of any alternative transaction, plus all reasonable and documented fees and expenses, plus all amounts outstanding under the DIP and senior indebtedness applies. The RSA includes a fiduciary out provision permitting the board to take or refrain from taking action required to comply with applicable law or fiduciary obligations.

The plan classifies claims and interests across eight classes. Classes 3 and 4 were entitled to vote and accepted unanimously. Classes 5, 6, 7, and 8(a) are deemed to reject and were bound through section 1129(b) cramdown.

Class	Status	Treatment
Class 2(a) — Enterprise Claims (~$16.4 million)	Unimpaired	Reinstated with maturity extended five years to April 30, 2031; existing life-insurance and pledged-account collateral remains in place
Class 3 — Senior Indebtedness Claims (~$23.95 million)	Impaired; voting accept	Pro rata share of Plan Sponsor Common Stock, representing 100% of reorganized equity
Class 4 — Subordinated Notes Claims (~$76.354 million)	Impaired; voting accept	Pro rata share of a Contingent Payment Certificate; projected recovery 0.33% to 6.55%
Class 5 — General Unsecured Claims ($222,000–$1.2 million)	Impaired; deemed rejecting	Pro rata share of $300,000 GUC Consideration; projected recovery 24.36% to 100%
Class 8(a) — Existing Impac equity	Impaired; deemed rejecting	Cancelled and extinguished; no recovery

Contingent Payment Certificate. Class 4 holders receive a pro rata share of a Contingent Payment Certificate entitling them to 10% of consolidated positive earnings of Impac and its subsidiaries for the three taxable years following the Effective Date, reduced dollar-for-dollar by any cash tax liability incurred during that period. The CPC is capped at $5 million and floored at $250,000, with maturity at 120 days following the end of the third taxable year. The Subordinated Notes Indenture Trustee is released from all duties and obligations on the Effective Date, with the indentures continuing solely for limited distribution and trustee-fee purposes.

Intercompany, 510(b), and equity. Intercompany claims will be adjusted, reinstated, or cancelled. Section 510(b) claims and equity interests will be cancelled and extinguished. Interests in debtor subsidiaries (Class 8(b)) are unimpaired and reinstated, preserving the corporate chain below Impac.

Releases and discharge. The confirmation order approves the plan's discharge under section 1141 effective on the Effective Date, subject to the section 523(a)(2)(A) and (B) carve-out for domestic governmental units. A permanent injunction under section 524(a) bars collection or recourse against the Debtors, Reorganized Debtors, Estates, and Released Parties. Third-party releases are opt-in via a Release Opt-In Election Form distributed as part of the solicitation package. The court retains exclusive jurisdiction under sections 105(a) and 1142.

Post-emergence governance. Upon the Effective Date, the existing board and officers will be replaced by a new three-member board nominated by Hildene. The reorganized debtors will continue operations including a secondment agreement with a technology firm to develop mortgage loan origination software. The order authorizes the Reorganized Debtors to adopt and implement a Management Incentive Plan, though the court did not approve the specific terms of that plan.

Key professionals. Dentons US LLP serves as lead debtor counsel, with Pachulski Stang Ziehl & Jones LLP as Delaware co-counsel. Development Specialists, Inc. serves as financial advisor. Kurtzman Carson Consultants dba Verita Global was retained as claims and balloting agent and tabulated the confirmation vote. Lowenstein Sandler LLP represents the DIP lender Hildene, and Armstrong Teasdale LLP represents Enterprise Bank & Trust. The Debtors' aggregate professional fee claim was approximately $1,888,000 as of solicitation, payable from a Professional Fee Escrow at 100%.

Best Interests Test and Feasibility Findings

Development Specialists, Inc. Senior Managing Director Eric J. Held filed a declaration in support of confirmation on May 26, 2026. DSI's liquidation analysis estimated $3,295,000 in recoverable asset value, reduced by approximately $1,420,000 in wind-down costs to leave roughly $1,875,000 — a pool that would be entirely absorbed by the Senior Indebtedness and Bridge Loan in a hypothetical chapter 7, leaving zero for administrative, priority, or general unsecured creditors. Because the plan provides distributions across those classes — including $300,000 in GUC Consideration — the court found the best interests test under section 1129(a)(7) satisfied.

DSI's feasibility projections run through Q4 2028 and contemplate modest originations and negative operating cash flows in initial quarters bridged by the DIP and Exit Loan facilities, transitioning to positive cash flow as monthly volume and margins normalize. The parties agreed that a formal going-concern valuation was unnecessary; the Held declaration describes the RSA's economic terms as a market-based resolution reached through arm's-length negotiation, and cites the Debtors' ability to secure the DIP and Exit facilities as a market-based indicator of feasibility.

Key Timeline

Date	Event
1995	Impac formed as REIT; began residential mortgage lending
2007	Subprime crisis; REIT status revoked, converted to C-corporation
2009	Trust preferred securities exchanged for Junior Subordinated Notes
2015	Acquisition of CashCall Mortgage
July 2020	Freddie Mac suspends direct loan sales
2020	Sold $4.2B UPB Freddie Mac MSRs; temporarily ceased lending
March 2022	Sold residual interests for $37.5 million
December 2022	Sold Ginnie Mae MSRs (~$68M UPB) for ~$725,000
Q1 2023	Wound down wholesale lending; pivoted to mortgage broker
December 2024	Paid off convertible promissory notes using ERTC funds
January 2026	Secured $2 million bridge note from Hildene
April 22, 2026	RSA executed; voting record date
April 26, 2026	Chapter 11 petitions filed (D. Del.); voting deadline 10:00 p.m. ET
April 27, 2026	Interim joint administration and NOL preservation orders entered
May 26, 2026	Solicitation and tabulation declaration, memorandum of law in support of confirmation, and Held declaration filed
May 28, 2026	Combined disclosure statement and confirmation hearing
May 29, 2026	Confirmation order entered
On or about June 25, 2026	RSA target Effective Date (60 days post-petition)
October 23, 2026	Governmental Bar Date
April 30, 2031	Enterprise Bank reinstated obligations mature

Frequently Asked Questions

When did the court confirm Impac Mortgage Holdings' chapter 11 plan?

Judge Craig T. Goldblatt entered findings of fact, conclusions of law, and a confirmation order on May 29, 2026, one day after the May 28, 2026 combined disclosure statement and confirmation hearing. The plan and plan documents become binding upon occurrence of the Effective Date, which the RSA targets no later than June 25, 2026.

How did Class 3 and Class 4 vote on the plan?

Both impaired voting classes accepted unanimously. Class 3 (Senior Indebtedness Claims) cast one ballot for $23,950,000 accepting and zero rejecting. Class 4 (Subordinated Noteholder Claims) cast two ballots for $62,000,000 accepting and zero rejecting. Kurtzman Carson Consultants dba Verita Global tabulated the votes.

Who is the plan sponsor and what does Hildene receive?

Hildene Re SPC, Ltd. is the plan sponsor and DIP lender. Hildene converts approximately $23.95 million in Senior Indebtedness claims into 100% of the reorganized company's Plan Sponsor Common Stock and extends a $5 million Exit Loan Facility at SOFR plus 4%, maturing 36 months after the Effective Date.

What happens to existing Impac shareholders?

Existing equity interests in Impac Mortgage Holdings (Class 8(a)) are cancelled and extinguished. Existing public shareholders receive no recovery. Interests in the debtor subsidiaries (Class 8(b)) are unimpaired and reinstated, preserving the corporate chain below Impac.

What do subordinated noteholders receive under the confirmed plan?

Holders of approximately $76.354 million in Junior Subordinated Notes receive a Contingent Payment Certificate entitling them to 10% of consolidated positive earnings over three taxable years post-emergence, reduced dollar-for-dollar by cash tax liability. The CPC is capped at $5 million and floored at $250,000. Projected recovery ranges from 0.33% to 6.55%.

Who is the claims agent for Impac Mortgage Holdings?

Kurtzman Carson Consultants dba Verita Global serves as the claims and balloting agent. The firm maintains the official claims register, distributes case notifications, and tabulated the confirmation vote. The Governmental Bar Date is October 23, 2026.

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