Simpson Thacher represented Blackstone in its acquisition of Stearns Holdings, LLC as part of the comprehensive financial restructuring plan agreed to between Stearns and funds affiliated with Blackstone. Stearns’ restructuring plan was confirmed by the Bankruptcy Court for the Southern District of New York on October 24, 2019, and Stearns emerged from chapter 11 bankruptcy on November 5, 2019. The plan, with support from Blackstone, has enabled Stearns to significantly reduce its outstanding debt, continue operations and preserve the jobs of its employees and has positioned the company for long-term success. Blackstone has been an investor in Stearns since August 2015, when funds managed by the private equity group of Blackstone acquired a majority stake in Stearns Holdings.
In connection with the restructuring, Blackstone has increased its ownership stake in the reorganized Stearns Holdings to 100% in exchange for a $75 million new money investment. Blackstone’s new money investment funded a recovery to Stearns Holdings’ prepetition secured noteholders and general unsecured creditors. In addition, during the restructuring process, Blackstone provided $35 million in “debtor in possession” financing, which was converted into a senior secured first lien term loan facility that will continue following Stearns’ emergence from bankruptcy. Stearns Holdings also issued a number of warrants to persons who held certain of its secured notes immediately prior to its emergence from bankruptcy, which are exercisable into Stearns Holdings securities.
Stearns Lending, LLC is a leading provider of mortgage lending services in Wholesale, Retail, Strategic Alliances, Non-Delegated Correspondent and Financial Institutions sectors throughout the United States.
The Simpson Thacher team includes Elisha Graff and Jamie Fell (Restructuring); Elizabeth Cooper, Michael Chao, James Nguyen and Ernesto Sanz (M&A); Brian Gluck, Soogy Lee, Michael Vernace and Adam Moss (Banking & Credit); Jeannine McSweeney and Eric Wolf (ECEB); Drew Purcell and Sarah Katz (Tax); and Steven Klar (Funds).