Residential Capital examiner plans to file report on Friday afternoon

By Caroline Salls

Pittsburgh, May 8 - Residential Capital, LLC's court-appointed examiner intends to file a report of his findings on Friday, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Examiner Arthur J. Gonzalez said he plans to file the report at noon or as soon as possible after that.

As previously reported, the company's official committee of unsecured creditors and Berkshire Hathaway Inc. sought appointment of an examiner, claiming that the ResCap debtors' first-day bankruptcy pleadings and public securities filings revealed dozens of transactions with Ally Financial Inc. and its affiliates involving billions of dollars of asset transfers and intercompany financing.

Berkshire Hathaway said the transactions' net effect was to transfer a substantial share of ResCap's operating assets to its parent.

Investigative scope

The court approved the scope of the examiner's investigation in July 2012. Gonzalez said then that, at a minimum, the scope of his examination would include the following:

• All material pre-bankruptcy transactions and all material verbal or written agreements or contracts between or among the ResCap debtors and Ally - formerly GMAC LLC - Cerberus Capital Management, LP and Ally Bank, a commercial state non-member bank chartered in Utah;

• The negotiation and entry into any plan sponsor, plan support, or settlement agreement, the debtor-in-possession financing with Ally Financial, the stalking horse asset purchase agreement with Ally Financial and any servicing agreement with Ally Bank;

• The activities of the debtors' officers and board of directors concerning the pre-bankruptcy transactions and agreements, the post-bankruptcy transactions and agreements, the investigation of the validity of claims against Ally Financial and the recruitment, compensation and indemnification of the debtors' officers and the members of the debtors' board of directors;

• The corporate relationships among the debtors, Ally Financial, Cerberus and Ally Bank and the conduct of each in connection with the debtors' decisions to file voluntary Chapter 11 petitions, pursue a sale of substantially all of their assets and enter into the pre-bankruptcy and post-bankruptcy transactions and agreements;

• All state and federal law claims or causes of action of the debtors against current or former directors and officers and against Ally Financial or its insiders;

• All state and federal law claims or causes of action the debtors propose or plan to release as part of their plan;

• The value of the releases contemplated by the debtors; and

• Other matters affecting the debtors' assets, liabilities and financial condition, including all intercompany claims and the debtors' solvency, capital adequacy and ability to pay debts as they became due at various dates before the bankruptcy filing.

Residential Capital, a New York-based real estate finance company, filed for bankruptcy on May 14, 2012. The case number is 12-12020.

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