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Wilmington Trust seeks standing to pursue claims on ResCap's behalf
By Jim Witters
Wilmington, Del., April 19 - The indenture trustee for Residential Capital, LLC's senior unsecured notes is seeking legal standing to prosecute claims and other causes of action on behalf of the debtor's estate, according to documents filed April 19 with the U.S. Bankruptcy Court for the Southern District of New York.
Wilmington Trust, NA - indenture trustee for about $1 billion of senior unsecured notes - wants to pursue claims belonging to the holding company in conjunction with third-party claims belonging to the trustee.
The claims purportedly are worth "several billion dollars," according to the filing.
If the trustee is granted legal standing, it will coordinate with the official committee of unsecured creditors on any prosecution it undertakes.
The committee also has sought legal standing to pursue claims on behalf of the estate.
Wilmington Trust says that "the committee motion does not adequately protect the rights of the noteholders and other HoldCo creditors."
The holding company's "most significant assets" are its claims against Ally Financial, Inc., including the fraudulent transfer of HoldCo's interest in Ally Bank, the motion states.
The assets also include claims against the operating companies.
Eight of the nine members of the creditors committee hold direct claims solely against the operating companies, so "it would be both imprudent and inherently improper for the noteholders' representative to be involved in controlling the prosecution and directly participating in the potential settlement of the HoldCo claims," the filing states.
A hearing to consider the motion is scheduled for 10 a.m. ET on 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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