8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  April 16, 2009

Walter Industries, Inc.

 (Exact name of registrant as specified in its charter)

Delaware	001-13711	13-3429953
(State or other jurisdiction of incorporation	Commission File No.	(I.R.S. Employer Identification No.)
or organization)

4211 W. Boy Scout Boulevard

Tampa, Florida 33607

(813) 871-4811

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

N/A

(Former Name or Former Address, if Changed from Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01        Other Events

On April 16, 2009, Walter Industries, Inc. (the “Company”) issued a press release announcing its estimated calculations of the cash and non-cash distributions to be made to its shareholders in the taxable dividend, and the stock consideration to be paid to its shareholders in the merger relating to the spin-off of its wholly-owned subsidiary, Walter Investment Management LLC and its merger into Hanover Capital Mortgage Holdings, Inc.A copy of the press release is incorporated by reference and attached hereto as Exhibit 99.1.

The information provided pursuant to this Item 8.01, including Exhibit 99.1, is “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission or incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filings.

************************

 Forward-Looking Statements. This report contains, in addition to statements of historical fact, certain forward-looking statements. These forward-looking statements relate to, among other things, the proposed merger and the combined company and involve risks and uncertainties. Actual results could differ from those currently anticipated due to a number of factors. Forward-looking statements are based on information available to management at the time, and they involve judgments and estimates. There can be no assurance as to the timing of the closing of the merger, or whether the merger will close at all.  Investors and security holders may obtain free copies of documents filed by Hanover Capital Mortgage Holdings, Inc. (“HCM”) and the Company with the Securities and Exchange Commission at the Securities and Exchange Commission’s web site at www.sec.gov.  In addition, investors and security holders may obtain free copies of the documents filed with the Securities and Exchange Commission by the Company at www.walterind.com and by HCM at www.hanovercapitalholdings.com. Neither the Company nor HCM assumes any responsibility to update any forward-looking statements as a result of new information or future developments except as expressly required by law.

Additional Information and Where to Find It. In connection with the proposed merger, HCM has filed relevant materials with the Securities and Exchange Commission, including a registration statement on Form S-4 that contains a prospectus and a proxy statement.  Investors and security holders are urged to read these materials because they contain important information about the merger, including information about the parties. The proxy statement/ prospectus and other relevant materials and any other documents filed by the Company or HCM with the Securities and Exchange Commission, may be obtained free of charge at the Securities and Exchange Commission’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the Securities and Exchange Commission by directing a written request to: Hanover Capital Mortgage Holdings, Inc. 200 Metroplex Drive, Suite 100, Edison, NJ 08817. Investors and security holders are urged to read the proxy statement/ prospectus and the other relevant materials when they become available before making any investment decision with respect to the merger.

No Offer or Solicitation. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

2

Item 9.01              Financial Statements and Exhibits

(d)          Exhibits

ExhibitNo. No.	Description
99.1	–	Press Release dated April 16, 2009, Walter Industries Announces Rate of Taxable Dividend and Estimate of Merger Consideration Payable in Connection with Spin-Off of Financing Business

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		WALTER INDUSTRIES, INC.
Date: April 17, 2009	By:	/s/ Catherine C. Bona
		Catherine C. Bona, Vice President
		Assistant General Counsel and Secretary

3

EX-99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE	Investor Contact: Mark Tubb
April 16, 2009	Vice President - Investor Relations
	813.871.4027
	mtubb@walterind.com
	Media Contact: Michael A. Monahan
	Director - Corporate Communications
	813.871.4132
	mmonahan@walterind.com

WALTER INDUSTRIES ANNOUNCES RATE OF TAXABLE DIVIDEND AND ESTIMATE OF

MERGER CONSIDERATION PAYABLE IN CONNECTION WITH SPIN-OFF OF FINANCING BUSINESS

(TAMPA, Fla.) - Walter Industries, Inc. (NYSE: WLT), a leading producer of U.S. metallurgical coal for the global steel industry, announced today its estimated calculations of  the cash and non-cash distributions to be made to its shareholders in the taxable dividend, and the stock consideration to be paid to its shareholders in the merger, relating to the spin-off of its wholly-owned subsidiary, Walter Investment Management LLC (“Spinco”) and its merger into Hanover Capital Mortgage Holdings, Inc. (“Hanover”).

As previously announced, after the close of trading on the NYSE on April 17,  Walter expects to declare a spin-off dividend of one Spinco interest for each share of Walter common stock outstanding on the Feb. 27, 2009 record date. Immediately following the spin-off, Spinco intends to pay a taxable dividend aggregating approximately $80 million in cash and additional Spinco interests to holders of Spinco interests received in the spin-off dividend, with the precise mix of cash and interests based, in part, on elections made on or prior to the election deadline of April 13 by record holders of Walter Industries common stock who will receive Spinco interests in the spin-off dividend.  Twenty percent of the taxable dividend will be paid in cash and the remainder will be paid in Spinco interests.

The tabulation of the results of the elections was completed today. Holders of more than twenty percent of the relevant shares elected to receive cash in the taxable dividend.  As a result, the amount of cash payable with respect to each Spinco interest electing cash will be prorated as described in the previously delivered election materials.  Due to proration, approximately 25.6 percent of the Spinco interests for which cash was elected will receive a cash payment from Spinco in the taxable dividend, and the remaining Spinco interests for which cash was elected instead will receive additional Spinco interests.

In the taxable dividend:

·Cash Election:  Spinco is expected to make a payment of approximately $1.51 per Spinco interest to holders of approximately 10.6 million Spinco interests electing to receive cash in the taxable dividend; and

·Stock Election: Spinco is expected to distribute approximately 0.3 Spinco interests per Spinco interest to holders of approximately 42.3 million Spinco interests who elected to receive Spinco interests, made no election, or elected to receive cash but instead are receiving Spinco interests as a result of proration;

4211 W. Boy Scout Blvd. | Tampa, Florida 33607 | Tel: 813.871.4811 | Web site: www.walterind.com

Following the spin-off and the taxable dividend, and subject to the satisfaction of all other conditions to closing the merger, Spinco will merge into Hanover.  The combined company will be named Walter Investment Management Corp. (NYSE Amex: WAC).  Based on the results of the taxable dividend elections, and as a result of the merger, Walter and Spinco estimate that:

·Cash Election: A holder of 100 shares of Walter Industries common stock entitled to receive Spinco interests in the spin-off who elected to receive cash in the taxable dividend will receive approximately $38.80 in cash in the taxable dividend and 36.5 shares of Walter Investment common stock in the merger; and

·Stock Election: A holder of 100 shares of Walter Industries common stock entitled to receive Spinco interests in the spin-off who elected to receive additional Spinco interests in the taxable dividend (or who made no election) will receive approximately 39 shares of Walter Investment common stock in the merger.

The closing of the merger and related transactions continue to be subject to the satisfaction of certain conditions. However, Walter Industries and Spinco currently expect to complete the spin-off, the taxable dividend and the merger of Hanover and Spinco after the close of trading on the NYSE on April 17.  Walter Investment is expected to begin “regular way” trading on the NYSE Amex when the market opens on Monday, April 20.  Shares of Walter Investment common stock issued in exchange for Spinco interests in the merger are expected to be distributed on or about April 20, 2009.

About Walter Industries

Walter Industries, Inc., based in Tampa, Fla., is a leading producer and exporter of metallurgical coal for the global steel industry and also produces steam coal, coal bed methane gas, furnace and foundry coke and other related products. The Company has annual revenues of approximately $1.5 billion and employs approximately 2,250 people. For more information about Walter Industries, please visit the Company website at www.walterind.com.

About Hanover Capital Mortgage Holdings

Hanover Capital Mortgage Holdings, Inc. is a mortgage REIT staffed by seasoned mortgage capital markets professionals. Hanover invests in prime mortgage loans and mortgage securities backed by prime mortgage loans. For further information, visit Hanover’s Web site at www.hanovercapitalholdings.com.

Additional Information and Where to Find It

In connection with the proposed spin-off of the Financing business of Walter Industries, Inc. through its wholly-owned subsidiary, Walter Investment Management LLC, and the proposed merger of Walter Investment Management LLC with Hanover Capital Mortgage Holdings, Inc. and certain related transactions, Hanover Capital Mortgage Holdings, Inc. filed a registration statement with the SEC on Form S-4, as amended, containing a proxy statement/prospectus (Registration No. 333-155091), and Hanover Capital Mortgage Holdings, Inc. will be filing other documents regarding the proposed transaction with the SEC as well. BEFORE MAKING ANY INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE FINAL PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final proxy statement/prospectus has been mailed to shareholders of Hanover Capital Mortgage Holdings, Inc. and Walter Industries, Inc. Shareholders will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about Hanover Capital Mortgage Holdings, Inc. and Walter Industries, Inc., without charge, at the SEC’s Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and the other filings with the SEC that will be incorporated by

2

reference in the proxy statement/prospectus can also be obtained, without charge, at Hanover Capital Mortgage Holdings, Inc.’s Web site (http://www.hanovercapitalholdings.com).

Walter Industries and Hanover and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed merger and related transactions. Information regarding Walter Industries’ directors and executive officers is available in Walter Industries’ proxy statement for its 2009 annual meeting of shareholders, which was filed with the SEC March 10, 2009 and revised April 8, 2009 and Walter Industries’ 2008 Annual Report on Form 10-K, which was filed on Feb. 27, 2009, and information regarding Hanover’s directors and executive officers is available in Hanover’s proxy statement for its 2008 annual meeting of shareholders and Hanover’s 2008 Annual Report on Form 10-K, which were filed with the SEC on April 24, 2008, and March 31, 2009, respectively. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in Hanover’s proxy statement/prospectus and other materials referred to in Hanover’s proxy statement/prospectus.

Safe Harbor Statement

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including expressions such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “may,” “will,” and similar expressions involve known and unknown risks, uncertainties, and other factors that may cause Walter Industries’ or Hanover’s actual results in future periods to differ materially from the expectations expressed or implied by such forward-looking statements. These factors include, among others, the following: the market demand for Walter Industries’ and Hanover’s products as well as changes in costs and the availability of raw material, labor, equipment and transportation; changes in weather and geologic conditions; changes in extraction costs, pricing and assumptions and projections concerning reserves in Walter Industries’ mining operations; changes in customer orders; pricing actions by Walter Industries’ and Hanover’s competitors, customers, suppliers and contractors; changes in governmental policies and laws; further changes in the mortgage-backed capital markets; changes in general economic conditions; and the successful implementation and anticipated timing of any strategic actions and objectives that may be pursued, including the announced separation of the Financing business from Walter Industries. In particular, the separation of Walter Industries’ Financing business is subject to a number of closing conditions which may be outside of Walter Industries’ control. Forward- looking statements made by Walter Industries in this release, or elsewhere, speak only as of the date on which the statements were made. Any forward-looking statements should be considered in context with the various disclosures made by Walter Industries and Hanover about our respective businesses, including the Risk Factors described in Walter Industries’ 2008 Annual Report on Form 10-K, the Risk Factors described in Hanover’s 2008 Annual Report on Form 10-K, and each of Walter Industries’ and Hanover’s other filings with the Securities and Exchange Commission. Neither Walter Industries nor Hanover undertakes any obligation to update its forward-looking statements as of any future date.

3