Impac Mortgage Holdings, Inc. and eleven affiliated debtor entities filed prepackaged Chapter 11 cases in the United States Bankruptcy Court for the District of Delaware on April 26, 2026. The cases are pending before the Honorable Craig T. Goldblatt under the lead case caption In re Impac Mortgage Holdings, Inc., et al., Case No. 26-10593 (CTG). Within 72 hours of the petition date, the Court entered an emergency NOL trading restriction order, all interim first-day orders, and a Confirmation Procedures Order scheduling a combined Disclosure Statement and Plan Confirmation Hearing for May 28, 2026 — 32 days after the petition date.

The case is structured around the preservation of an extraordinary quantum of tax attributes. The Debtors estimate a minimum of $850 million in federal net operating loss carryforwards and $600 million in California NOL carryforwards as of December 31, 2025. The Plan provides for the conversion of approximately $24 million of Senior Indebtedness held by Hildene re SPC, Ltd. into 100% of the New Common Stock of Reorganized Impac, transforming the company from a publicly traded entity into a privately held one. The Restructuring Support Agreement requires plan confirmation within 45 days of the petition date and an effective date within 60 days.

Impac Mortgage Holdings, Inc. was formed in 1995 as a Real Estate Investment Trust. According to the First-Day Declaration, the company maintained REIT status until the subprime mortgage crisis of 2007–2008 compelled revocation and a strategic pivot to a mortgage broker model. The lead Debtor and its eleven subsidiary debtors share a common address at 19800 MacArthur Blvd., Suite 500, Irvine, California 92612.

Corporate Family

The twelve debtor entities are all affiliated mortgage-related enterprises. The lead Debtor is Impac Mortgage Holdings, Inc.; the eleven subsidiary debtors are Copperfield Financial, LLC; Copperfield Capital Corporation; Impac Funding Corporation; Impac Commercial Capital Corporation; Impac Secured Assets Corp.; IMH Assets Corp.; Integrated Real Estate Service Corp.; Impac Mortgage Corp. (“IMC”); Impac Warehouse Lending, Inc.; Synergy Capital Mortgage Corp.; and Impac Warehouse Lending Group, Inc.

Workforce and Public Status

At the time of filing, the Debtors’ workforce consisted of 18 full-time employees — 10 employed by Impac and 8 by IMC — none subject to collective bargaining. The Debtors’ common stock trades on the OTC market under the ticker symbol “IMPM” with a market capitalization of approximately $2.9 million as of the petition date.

Technology Posture

On March 17, 2026, Impac and IMC entered into a Secondment Agreement with Dagdafi, Inc. d/b/a First Agentic for the development of AI-powered mortgage loan origination software. The Plan designates this agreement for assumption, and the Disclosure Statement’s financial projections contemplate a ramp-up in mortgage origination activity post-emergence that the Debtors associate with this technology platform.

The events leading to the Chapter 11 filing trace back nearly two decades. The First-Day Declaration identifies the 2007–2008 subprime mortgage crisis as the inflection point that compelled revocation of REIT status and the transition to a mortgage broker model. The Debtors generated significant operating losses during the crisis and in subsequent years — the source of the NOLs that now anchor the restructuring — and never returned to a sustained profitability profile sufficient to service their funded debt stack.

By the petition date, several distress indicators had crystallized:

The book balance sheet does not capture the off–balance-sheet value of the NOLs — estimated by the Debtors at a minimum of $850 million federal and $600 million California as of December 31, 2025. The First-Day Declaration frames the case as a transaction to preserve and monetize that off–balance-sheet value through a debt-to-equity conversion, rather than a traditional operating reorganization.

The First-Day Declaration and Emergency NOL Motion identify the tax attributes as the most valuable asset of the Debtors’ estates and the primary motivation for the restructuring. The Plan is designed to qualify for the bankruptcy exception under Internal Revenue Code § 382(l)(5) (the “L5 Exception”), which permits a debtor emerging from bankruptcy to avoid the general § 382 annual limitation on NOL usage if the debtor’s historic shareholders and qualified creditors own at least 50% of the reorganized entity’s stock.

Why the L5 Exception Matters

The Emergency Motion explains that a standard § 382 ownership change triggered in bankruptcy would reduce the annual NOL usage to the product of the fair market value of the debtor’s equity (here, approximately $2.9 million) multiplied by the applicable long-term tax-exempt rate — a small annual cap relative to the underlying carryforwards. Qualifying for the L5 Exception, by contrast, allows the reorganized entity to preserve the economic value of the carryforwards subject to the exception’s post-emergence restrictions.

Defined Terms in the Trading Restriction Regime

The Emergency Motion and Interim NOL Order use two defined terms to identify the categories of holders subject to notification and approval requirements. A “Substantial Stockholder” is any person or entity beneficially owning, or having options to acquire, common stock totaling at least 1,645,000 shares — approximately 4.5% of outstanding shares as of December 31, 2025. A “50-Percent Shareholder” is any person or entity that, at any time since December 31, 2025, has owned beneficial ownership of 50% or more of the common stock, as determined under § 382(g)(4)(D).

Legal Authority

The Emergency Motion grounds the trading restrictions in a line of cases holding that NOLs constitute property of the estate under §§ 362 and 541, citing Gibson v. United States (In re Russell), 927 F.2d 413 (8th Cir. 1991), and In re Prudential Lines Inc., 928 F.2d 565 (2d Cir. 1991). The motion also relies on the Court’s equitable powers under § 105(a) per In re Phar-Mor, Inc., 152 B.R. 924 (Bankr. N.D. Ohio 1993), and cites Delaware and S.D.N.Y. precedent including In re Carestream Health, In re Riverbed Tech., In re AMR Corp., and In re Delta Air Lines.

Aggregate funded indebtedness exceeded $100 million as of the petition date. The capital structure features a layered set of secured and subordinated obligations, with Hildene re SPC, Ltd. occupying the senior-most position through the Prepetition Loan and an assigned Bridge Note.

Equity interests include common stock, 8.25% Series D Cumulative Redeemable Preferred Stock, warrants, and outstanding equity awards. The First-Day Declaration confirms that no “ownership change” under IRC § 382 had occurred as of the petition date.

The Restructuring Support Agreement was executed effective April 22, 2026, four days before the petition date. The RSA binds three categories of parties: the Debtors; Hildene, in its capacities as Plan Sponsor and DIP Lender; and the Consenting Subordinated Noteholders — Taberna Preferred Funding 1 LTD and Taberna Preferred Funding 2 LTD. Hildene and the Taberna entities executed signature pages on April 21, 2026, one day before the RSA Effective Date.

Hildene’s Multi-Capacity Role

The RSA, the DIP Agreement, and the Plan together describe five capacities in which Hildene participates in the transaction:

Plan Sponsor Protections

The RSA includes a Breakup Fee/Reimbursement Amount payable in the event an Alternative Transaction is consummated. The amount comprises (i) full reimbursement of all reasonable and documented Plan Sponsor fees and expenses, (ii) 3% of the Alternative Transaction value, and (iii) all amounts outstanding under the DIP Loan and Senior Indebtedness. The RSA also grants Hildene a right of first refusal with respect to any Alternative Proposal. The Debtors retain a fiduciary out provision permitting them to pursue a superior alternative if their boards determine that failure to do so would be inconsistent with fiduciary duties.

Milestones

The RSA imposes a sequenced set of milestones that, if missed, constitute termination events. The DIP Agreement mirrors these milestones as Events of Default, creating a dual enforcement mechanism.

The DIP Facility is a $5,000,000 senior secured superpriority term loan provided by Hildene, structured in two components: a cashless, dollar-for-dollar roll-up of the $2,000,000 Bridge Note Obligations (effective upon entry of the Interim DIP Order); and up to $3,000,000 in new money term loans, with $1,500,000 available on an interim basis and the remaining $1,500,000 available upon entry of a Final Order.

Economic Terms

Carve-Out, Challenge Period, and Market Check

The Carve-Out is structured in three tiers: U.S. Trustee fees (unlimited); pre-trigger professional fees (per the approved Budget, excluding success fees); and post-trigger professional fees (capped at $125,000 in the aggregate). The Interim DIP Order establishes a 75-day Challenge Period during which any party in interest may investigate the validity, perfection, priority, and extent of the Prepetition Secured Parties’ liens and claims, with the investigation budget capped at $25,000.

The DIP Motion documents a prepetition market check by the Debtors’ financial advisor, DSI, in which capital providers were contacted on a no-names basis. According to the supporting declaration, no party was willing to enter into a confidentiality agreement or offer more favorable terms; the only actionable proposal was from Hildene.

Seven-Week DIP Budget

The seven-week DIP budget reveals the cash flow profile of an essentially non-operational enterprise from a revenue perspective:

The DIP Facility is projected to be fully drawn by Week 6, with ending unrestricted cash of approximately $328,000. The DIP Motion frames the facility as funding professional fees and case administration costs rather than ongoing business operations, consistent with the minimal operational footprint described in the First-Day Declaration.

The Plan classifies claims and interests into eight numbered classes (with several subclasses) plus four categories of unclassified claims. The two voting classes — Class 3 (held by Hildene) and Class 4 (held by the Taberna entities) — have voted to accept with 100% in amount and number, consistent with the prepackaged structure. Classes 5, 6, 7, and 8(a) are deemed to reject, and the Debtors intend to seek cramdown under § 1129(b).

The Contingent Payment Certificate

The Contingent Payment Certificate is the sole consideration for holders of approximately $76.4 million in Subordinated Notes. The Plan and RSA specify the calculation as 10% of consolidated positive earnings of Impac and its subsidiaries for the three taxable years following the Plan Effective Date, due no later than 120 days following the end of the third taxable year, capped at $5,000,000 and floored at $250,000. The Disclosure Statement’s estimated recovery range of 0.33% to 6.55% maps to the floor and cap, respectively.

Best Interests Test — Liquidation vs. Plan

The Disclosure Statement’s liquidation analysis indicates that the NOLs — the estate’s most valuable asset — would be entirely worthless in liquidation because there would be no continuing entity to utilize them.

Release Architecture

The Plan’s third-party release is structured as an opt-in mechanism: parties must affirmatively elect to grant releases by submitting a Third-Party Release Opt-In Form. The Confirmation Procedures Motion describes this structure as designed to comply with the Supreme Court’s 2024 decision in Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024), which held that non-consensual third-party releases exceeding the scope of § 524(g) are not authorized by the Bankruptcy Code. The Debtor/Estate Release, exculpation, and discharge provisions follow standard formulations with carve-outs for actual fraud, gross negligence, and willful misconduct.

The Court entered NOL trading restrictions in a three-stage sequence designed to provide immediate protection while preserving due process for affected stakeholders.

The Emergency Motion characterizes the NOL protection orders as the “first line of defense” for the restructuring. The motion explains that, without them, even a single unauthorized stock trade could theoretically trigger an ownership change that would vitiate the § 382(l)(5) exception and undermine the economic rationale of the Plan Sponsor’s investment.

The Confirmation Procedures Order, entered by Judge Goldblatt on April 29, 2026, establishes the procedural framework for a combined Disclosure Statement and Plan Confirmation Hearing as authorized under § 105(d)(2)(B)(vi). The order schedules the combined hearing for May 28, 2026 and sets the deadlines below.

The Confirmation Procedures Order also addresses administrative matters: the Debtors are conditionally excused from filing Schedules of Assets and Liabilities, Statements of Financial Affairs, and Rule 2015.3 reports, with the waiver expiring approximately 75 days post-petition (approximately July 10, 2026) if the Plan is not confirmed. The § 341 meeting of creditors is similarly waived on the same conditional basis.