H&R Block sells Option One mortgage loan servicing business to WL Ross for $1.1 billion
Client(s) H&R Block Inc.
Jones Day represented H&R Block Inc. and its Option One Mortgage Corporation (OOMC) subsidiary in the sale of OOMC's mortgage loan servicing business to an entity sponsored by the WL Ross & Co. private equity firm for $1.1 billion.
This representation is the second time that Jones Day has worked with H&R Block in an effort to sell its subprime mortgage operations. In 2007, H&R Block entered into an agreement to sell OOMC's origination and servicing business to Cerberus, but that transaction did not close as the parties were unable to agree on amendments to the agreement to reflect the drastic changes in the real estate finance industry.
OOMC shut down its mortgage loan origination business, but continued mortgage loan servicing. Jones Day was again retained to assist H&R Block and OOMC in the sale of this business. After a competitive sale process, H&R Block and OOMC were able to reach an agreement with WL Ross & Co. The transaction posed a number of significant challenges, including allocating responsibility for historic obligations and contingent liabilities, as well as crafting closing conditions that were appropriate for the tumultuous times faced by the industry. In addition to M&A representation, Jones Day provided employee benefits, environmental, financing, and tax advice regarding this transaction.