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Ally Financial preparing mortgage subsidiary bankruptcy


PlanMaestro
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http://www.ft.com/cms/s/0/ca4cd9de-9927-11e1-9a57-00144feabdc0.html#ixzz1uIrNDhMi

 

Ally Financial, the lender 74 per cent owned by the US government after a 2009 bailout, is considering placing its mortgage subsidiary into bankruptcy to escape nagging liabilities.

 

The US Treasury gave the green light for the move on Monday and the subsidiary, known as Residential Capital, faces a wave of maturing debt next week. Some stakeholders, government officials and bankruptcy lawyers warn that a clean break might not be possible and investors in ResCap’s bad mortgage loans might successfully pursue the parent company.

 

If Ally Financial does successfully shed ResCap it will reawaken speculation that Bank of America could try to place into bankruptcy Countrywide, its troubled mortgage subsidiary, which has cost it billions of dollars since it was bought in a disastrous 2008 acquisition.

 

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http://www.ft.com/cms/s/0/ca4cd9de-9927-11e1-9a57-00144feabdc0.html#ixzz1uIrNDhMi

 

Ally Financial, the lender 74 per cent owned by the US government after a 2009 bailout, is considering placing its mortgage subsidiary into bankruptcy to escape nagging liabilities.

 

The US Treasury gave the green light for the move on Monday and the subsidiary, known as Residential Capital, faces a wave of maturing debt next week. Some stakeholders, government officials and bankruptcy lawyers warn that a clean break might not be possible and investors in ResCap’s bad mortgage loans might successfully pursue the parent company.

 

If Ally Financial does successfully shed ResCap it will reawaken speculation that Bank of America could try to place into bankruptcy Countrywide, its troubled mortgage subsidiary, which has cost it billions of dollars since it was bought in a disastrous 2008 acquisition.

 

Very interesting. Thanks for the article.

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