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ResCap reaches plan support agreement with major creditors and Ally
By Caroline Salls
Pittsburgh, May 14 - Residential Capital, LLC entered into a comprehensive Chapter 11 plan support agreement with parent company Ally Financial Inc. and ResCap's major creditors, according to a company news release.
ResCap said the agreement settles existing and potential claims between the company and Ally and potential claims held by third parties, except for some securities claims held by the Federal Housing Finance Agency and the Federal Deposit Insurance Corp., as receiver for some failed banks.
The details of the plan support agreement will be kept confidential until a motion for approval is filed with the U.S. Bankruptcy Court for the Southern District of New York later this month, the release said.
The company said the settlement was reached as a part of mediation with its creditors and Ally.
Specific parties to the comprehensive settlement include ResCap and its affiliated debtor entities, Ally and its consolidated subsidiaries, the official committee of unsecured creditors in the company's bankruptcy case, AIG Asset Management (U.S.), LLC, Allstate Insurance Co., Financial Guaranty Insurance Co., counsel a Community Bank of Northern Virginia second mortgage lending practice lawsuit class, Massachusetts Mutual Life Insurance Co., MBIA Insurance Corp., Paulson & Co. Inc., Prudential Insurance Co. of America, some investors in securities backed by mortgage loans held by trusts associated with securitizations sponsored by the debtors between 2004 and 2007, some senior unsecured noteholders, senior unsecured notes trustee Wilmington Trust, NA and some trustees or indenture trustee for mortgage-backed securities trusts.
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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