Ally unit ResCap files for bankruptcy
Source: Detroit News Washington Bureau
Washington Ally Financial Inc.'s troubled mortgage unit Residential Capital LLC filed for Chapter 11 bankruptcy early Monday as the Detroit-based auto lender said it may sell its international businesses.
Ally Financial, a bank holding company that is 74 percent owned by the U.S. Treasury as part of a $17.2 billion bailout, said the company expects to lose $1.3 billion as part of ResCap's bankruptcy restructuring.
ResCap and about 30 other affiliated entities including GMAC Mortgage LLC and Ditech LLC filed for bankruptcy in New York and said it has reached agreement with certain of its key creditors, including Ally, on the terms of a prearranged Chapter 11 plan that it hopes will allow ResCap to exit court restructuring by the end of the year.
ResCap which focused on subprime mortgages and services 2.4 million loans in its bankruptcy filing listed assets of $15.7 billion and debts of $15.3 billion. It faced default on a $20 million debt payment this week if it hadn't sought court protection - and hundreds of millions in additional payments would have been coming due in the following months.
Read more: http://www.detroitnews.com/article/20120514/AUTO01/205140369/Ally-unit-ResCap-files-bankruptcy?odyssey=tab|topnews|text|FRONTPAGE
Who would have ever thought that this might happen? Ally Bank was GMAC bank.
If I had a bank account at this place, I think I'd be rid of it quickly -- just an opinion for what that may be worth these days ...