ResCap requests exclusivity extension to resolve intercreditor issues

By Caroline Salls

Pittsburgh, April 22 - Residential Capital, LLC requested an extension of its exclusive periods for filing a plan of reorganization and soliciting votes on that plan, according to an April 19 filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company wants to extend its exclusive filing period through July 10 and the solicitation period through Sept. 9.

On March 5, the court extended the exclusive filing period to April 30 and the solicitation period to July 1. The court subsequently entered a bridge order extending exclusivity through May 7.

ResCap said significant progress has been made toward achieving consensus on major issues and in developing a Chapter 11 plan with creditor support.

The company said Kruger and ResCap's advisers have been participating in settlement discussions, both in and out of mediation, regarding complex intercreditor disputes that must be resolved in order to move forward with any Chapter 11 plan.

ResCap said the issues include whether claims filed by various monoline insurers should be disallowed or subordinated and the related question of whether those monoline insurers control the claims of the RMBS trusts that they "wrapped;" whether the holders of junior secured guarantee notes are oversecured and entitled to any post-bankruptcy interest; the approval of a proposed RMBS settlement; and the priority of claims arising under securities laws related to the company's residential mortgage-backed securities.

Kruger also led the company in the continuing negotiations concerning the settlement of claims against Ally Financial Inc., the motion said.

ResCap said it and all of its major creditor constituencies are now busy preparing for a global mediation summit scheduled for next week in an attempt to bring the parties together to reach consensus on the important issues.

A hearing is scheduled for May 7.

Residential Capital, a New York-based mortgage originator and servicer, filed for bankruptcy on May 14, 2012. Its case number is 12-12020.

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