PHH Corp. has received payment of a $50 million reverse termination fee from Blackstone Capital Partners V LP, the private equity fund affiliated with the Blackstone Group LP, in connection with the previously announced termination of (i) the merger agreement between PHH and General Electric Capital Corp. (GECC) and (ii) the agreement pursuant to which Blackstone was to acquire PHH's mortgage banking business from GECC.
Blackstone paid this amount in accordance with its contractual obligations to PHH. PHH has agreed to pay up to $4.5 million in payment of the fees of third-party consultants retained by Blackstone in connection with the contemplated transactions and will be receiving the work product that those consultants provided to Blackstone.
‘We share PHH's disappointment that this transaction was not able to be completed,’ says Chinh Chu, Blackstone's senior managing director. ‘It is especially regrettable that, even for a company of PHH's quality, acquisition financing for any part of the mortgage sector was unavailable as a result of the subprime crisis.’