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ResCap agrees to settle more than $290 million in RMBS-related claims
By Caroline Salls
Pittsburgh, Oct. 28 - Residential Capital, LLC requested court approval of a settlement with the National Credit Union Administration Board, as liquidating agent for Western Corporate Federal Credit Union and U.S. Central Federal Credit Union, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.
ResCap said the settlement resolves hundreds of millions of dollars of claims related to its residential mortgage-backed securities (RMBS).
Specifically, the company said the agreement resolves more than $290 million in claims the NCUAB has asserted against the ResCap debtors in these Chapter 11 cases for an allowed claim in the amount of $78 million.
ResCap said resolution of the claims is an important step toward confirmation of its plan of reorganization, and the occurrence of the plan effective date is a condition of the settlement.
Under the settlement, the board agreed to release all claims against the ResCap debtors, their non-debtor affiliates, Ally Financial and Ally Securities.
In exchange, the board will receive a total of $78 million in allowed general unsecured claims, with $77.85 million of the claims to go against the Residential Accredit Loans, Inc. debtor and $149,000 against the Residential Funding Mortgage Securities II debtor.
The claims will not be subject to subordination.
In addition, the board agreed to support the plan and consented to plan releases.
A hearing is scheduled for Nov. 19.
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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