Payables and Accrued Liabilities

Payables and accrued liabilities consist of the following (in thousands):



	Successor		Predecessor
	December 31, 2018		December 31, 2017
Loans subject to repurchase from Ginnie Mae	$	466,452	$	542,398
Accounts payable and accrued liabilities	109,696		129,731
Curtailment liability	99,781		140,905
Employee-related liabilities	45,480		52,097
Loan repurchase obligation	29,360		31,704
Originations liability	28,240		25,613
Accrued interest payable	18,833		33,322
Derivative instruments	13,737		1,250
Servicing rights and related advance purchases payable	12,615		14,923
Uncertain tax positions	3,660		5,601
Other	40,168		42,756
Subtotal	868,022		1,020,300
Less: Liabilities subject to compromise⁽¹⁾	—		25,807
Total payables and accrued liabilities	$	868,022	$	994,493

__________


(1)	Liabilities subject to compromise consist of accrued interest related to the Senior Notes and Convertibles Notes. Refer to Note 2 for additional information.

In connection with the adoption of fresh start accounting, the Company recorded adjustments resulting in a reduction to payables and accrued liabilities totaling $7.4 million at February 9, 2018, as further described in Note 2.

Costs Associated with Exit Activities

The Company exited the consumer retail channel of the Originations segment in January 2016 following a decision made during the fourth quarter of 2015. Further, following a decision made in December 2016 and effective January 2017, the Company exited the reverse mortgage originations business, while maintaining its reverse mortgage servicing operations. These actions resulted in costs relating to the termination of certain employees and closing of offices. The actions that were taken in connection with these efforts are collectively referred to as the 2016 and Prior Actions herein.

The Company continued with the transformation of the business during 2017 in an effort to optimize the workforce, processes and functional locations of its businesses as it seeks to achieve sustainable growth. Accordingly, the Company incurred costs, including severance and related costs, office closures, which included the Irving, TX location, and other costs in connection with its transformation efforts during 2017. The actions that were taken in connection with these efforts are collectively referred to as the 2017 Actions herein.

During 2018, the Company continued to optimize its operations, which included consideration of further site consolidations, process improvements and workforce rationalization. Accordingly, the Company incurred costs, including severance and related costs, office closures, and other costs during 2018. The actions that have been taken in connection with these efforts are collectively referred to as the 2018 Actions herein.

In addition, during 2019, as the Company pursues the DHCP Plan and continues with the prepetition review of strategic alternatives as detailed in Note 31, there may be further severance and related costs, office closures and other costs incurred by the Company. The costs associated with such actions will be included in the exit liability as such time that each action is approved by management.

The costs resulting from the 2016 and Prior Actions, 2017 Actions and 2018 Actions are recorded in salaries and benefits and general and administrative expenses on the Company's consolidated statements of comprehensive income (loss).

The following table presents the current period activity in the accrued exit liability resulting from each of the 2016 and Prior Actions, 2017 Actions and 2018 Actions described above, which is included in payables and accrued liabilities on the consolidated balance sheets, and the related charges and cash payments and other settlements associated with these actions (in thousands):



	Successor
	For the Period From February 10, 2018 Through December 31, 2018
	2016 and Prior Actions			2017 Actions			2018 Actions			Total
Balance at February 10, 2018	$	472		$	14,837		$	616		$	15,925
Charges
Severance and related costs⁽¹⁾	34			(118		)	6,940			6,856
Office closures and other costs⁽¹⁾	(107		)	1,536			4,797			6,226
Total charges	(73		)	1,418			11,737			13,082
Cash payments or other settlements
Severance and related costs	(127		)	(1,495		)	(5,609		)	(7,231		)
Office closures and other costs	(242		)	(3,525		)	(272		)	(4,039		)
Total cash payments or other settlements	(369		)	(5,020		)	(5,881		)	(11,270		)
Balance at December 31, 2018	$	30		$	11,235		$	6,472		$	17,737

Cumulative charges incurred
Severance and related costs	$	26,987		$	9,013		$	7,567		$	43,567
Office closures and other costs	10,358			14,969			4,797			30,124
Total cumulative charges incurred	$	37,345		$	23,982		$	12,364		$	73,691

Total expected costs to be incurred	$	37,345		$	23,982		$	13,998		$	75,325




	Predecessor
	For the Period From January 1, 2018 Through February 9, 2018
	2016 and Prior Actions			2017 Actions			2018 Actions			Total
Balance at January 1, 2018	$	540		$	15,955		$	—		$	16,495
Charges
Severance and related costs⁽¹⁾	(21		)	72			627			678
Office closures and other costs⁽¹⁾	19			234			—			253
Total charges, net	(2		)	306			627			931
Cash payments or other settlements
Severance and related costs	—			(948		)	(11		)	(959		)
Office closures and other costs	(66		)	(476		)	—			(542		)
Total cash payments or other settlements	(66		)	(1,424		)	(11		)	(1,501		)
Balance at February 9, 2018	$	472		$	14,837		$	616		$	15,925

__________


(1)	Includes adjustments to prior year accruals resulting from changes to previous estimates.

The following table presents the current period activity for each of the 2016 and Prior Actions, 2017 Actions, and 2018 Actions described above by reportable segment (in thousands):



	Successor
	For the Period From February 10, 2018 Through December 31, 2018
	Servicing			Originations			Reverse Mortgage			Corporate and Other			Total Consolidated
Balance at February 10, 2018
2016 and Prior Actions	$	289		$	68		$	18		$	97		$	472
2017 Actions	13,718			44			387			688			14,837
2018 Actions	527			16			27			46			616
Total balance at February 10, 2018	14,534			128			432			831			15,925
Charges
2016 and Prior Actions⁽¹⁾	(66		)	(41		)	34			—			(73		)
2017 Actions⁽¹⁾	1,591			(8		)	(84		)	(81		)	1,418
2018 Actions	3,707			5,770			472			1,788			11,737
Total charges, net	5,232			5,721			422			1,707			13,082
Cash payments or other settlements
2016 and Prior Actions	(215		)	(27		)	(30		)	(97		)	(369		)
2017 Actions	(4,109		)	(36		)	(303		)	(572		)	(5,020		)
2018 Actions	(2,042		)	(1,805		)	(499		)	(1,535		)	(5,881		)
Total cash payments or other settlements	(6,366		)	(1,868		)	(832		)	(2,204		)	(11,270		)
Balance at December 31, 2018
2016 and Prior Actions	8			—			22			—			30
2017 Actions	11,200			—			—			35			11,235
2018 Actions	2,192			3,981			—			299			6,472
Total balance at December 31, 2018	$	13,400		$	3,981		$	22		$	334		$	17,737

Total cumulative charges incurred
2016 and Prior Actions	$	18,001		$	5,590		$	7,175		$	6,579		$	37,345
2017 Actions	19,398			895			1,222			2,467			23,982
2018 Actions	4,234			5,797			499			1,834			12,364
Total cumulative charges incurred	$	41,633		$	12,282		$	8,896		$	10,880		$	73,691

Total expected costs to be incurred
2016 and Prior Actions	$	18,001		$	5,590		$	7,175		$	6,579		$	37,345
2017 Actions	19,398			895			1,222			2,467			23,982
2018 Actions	5,542			5,797			499			2,160			13,998
Total expected costs to be incurred	$	42,941		$	12,282		$	8,896		$	11,206		$	75,325




	Predecessor
	For the Period From January 1, 2018 Through February 9, 2018
	Servicing			Originations			Reverse Mortgage			Corporate and Other			Total Consolidated
Balance at January 1, 2018
2016 and Prior Actions⁽²⁾	$	348		$	77		$	18		$	97		$	540
2017 Actions⁽²⁾	14,317			91			483			1,064			15,955
2018 Actions⁽²⁾	—			—			—			—			—
Total balance at January 1, 2018⁽²⁾	14,665			168			501			1,161			16,495
Charges
2016 and Prior Actions⁽¹⁾	(5		)	3			—			—			(2		)
2017 Actions⁽¹⁾	289			16			2			(1		)	306
2018 Actions	527			27			27			46			627
Total charges, net	811			46			29			45			931
Cash payments or other settlements
2016 and Prior Actions	(54		)	(12		)	—			—			(66		)
2017 Actions	(888		)	(63		)	(98		)	(375		)	(1,424		)
2018 Actions	—			(11		)	—			—			(11		)
Total cash payments or other settlements	(942		)	(86		)	(98		)	(375		)	(1,501		)
Balance at February 9, 2018
2016 and Prior Actions	289			68			18			97			472
2017 Actions	13,718			44			387			688			14,837
2018 Actions	527			16			27			46			616
Total balance at February 9, 2018	$	14,534		$	128		$	432		$	831		$	15,925

__________


(1)	Includes adjustments to prior year accruals resulting from changes to previous estimates.


(2)	Effective January 1, 2018, the Company no longer allocates corporate overhead to its operating segments. These amounts are now included in the Corporate and Other non-reportable segment. Prior year balances have been restated to conform to current year presentation.