Impac Mortgage Holdings Inc (IMPM)

[Enterprising Investor]

Impac Mortgage Holdings, Inc. Discloses Update Regarding Litigation Matter and Revolving Credit Facility Breach/Waiver (10/18/24)

Newport Beach, CA, October 18, 2024 – Impac Mortgage Holdings, Inc. [OTC Pink Limited: IMPM] provides the following update regarding (i) a previously disclosed litigation matter and (ii) a recent revolving credit facility breach/waiver:

Litigation Matter Update (certain information below has been previously disclosed in prior SEC/OTC filings):

UBS Americas Inc., et al. v. Impac Funding Corporation et al.

On December 17, 2021, a summons with notice was filed in the Supreme Court of the State of New York, County of New York (“NY Court”), initiating a lawsuit entitled UBS Americas Inc., et al. v. Impac Funding Corporation et al. As further detailed below, this lawsuit pertains to residential loan securitizations dating back to 2005 and 2006.

The plaintiffs (which include UBS Americas Inc., UBS Real Estate Securities, Inc., UBS Securities, LLC, and Mortgage Asset Securitizations Transactions, Inc.) contend that the defendants (Impac Funding Corporation (“IFC”), Impac Mortgage Holdings, Inc. (“IMH”) and Novelle Financial Services, Inc. (“Novelle”)) are required to indemnify payments that plaintiffs made to resolve claims asserted by (i) the Federal Home Loan Bank of San Francisco (“FHLB-SF”) in the matters FHLB-SF v Credit Suisse et al pertaining to securitization MALT 2005-6 (“CS Lawsuit”) and FHLB-SF v Deutsche Bank et al pertaining to securitization MALT 2006-2 (“DB Lawsuit”) and (ii) HSH Nordbank AG (“HSH”) in the matter HSH v UBS AG et al pertaining to securitization MABS 2006-HE1 (“UBS Lawsuit”). Plaintiffs contend that the securitizations included residential loans that the defendants allegedly sold to the UBS entities in breach of contractual representations and warranties. Plaintiffs further contend that they settled the cases, for which plaintiffs are demanding indemnification, in December 2015 and March 2016.

On April 18, 2022, IMH accepted service of the Summons with Notice on behalf of IFC and IMH (Novelle was sold to a third party in September 2006). On June 2, 2022, a Complaint was filed with the NY Court related to the Summons with Notice, however IMH was no longer listed as a defendant in the matter. On July 25, 2022, IFC filed a Motion to Dismiss the Complaint. All parties submitted their briefs and oral arguments on the Motion to Dismiss were held on March 6, 2023.

On October 13, 2024, the NY Court issued its Decision and Order on Defendants' Motion to Dismiss. With respect to the parties to the action, the NY Court dismissed all claims by plaintiff UBS Americas Inc., and dismissed all claims against defendants IMH and Novelle. The dismissal of Novelle resolved all indemnification claims that had been pending in connection with the UBS Lawsuit. The NY Court also dismissed, with leave to amend, the indemnification claims pertaining to the DB Lawsuit. The indemnification claims pertaining to the CS Lawsuit were not dismissed.

Should the remaining plaintiffs decide to file an amended complaint, IFC intends to defend itself vigorously as it believes any remaining claims continue to be without merit.

Revolving Credit Facility Breach/Waiver:

IMH also discloses that it recently requested, and received, from its lender waivers of certain quarterly Consolidated EBITDA and Consolidated Revenue financial covenants under its revolving credit facility.

https://www.otcmarkets.com/otcapi/company/dns/news/document/77834/content