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After Ally put its ResCap mortgage unit into bankruptcy on Monday, ResCap CEO Tom Marano discussed the future of the unit’s assets and staff in an interview.
May 14
Residential Capital LLC rejected an offer from Berkshire Hathaway Inc. (BRK/A), the holding company run by billionaire Warren Buffett, to be the initial bidder in proposed auctions of ResCap's most valuable assets.
ResCap asked the judge overseeing its bankruptcy to name a Fortress Investment Group LLC (FIG) affiliate and Ally Financial Inc. (ALLY) as the so-called stalking-horse bidders for separate auctions, according to court papers filed yesterday in Manhattan.
Before ResCap entered bankruptcy May 14, it negotiated a deal to name Fortress as the lead bidder, with a $2.4 billion offer, in a proposed auction for ResCap's mortgage unit. Ally, ResCap's parent, separately offered $1.4 billion for a set of loan assets.
U.S. Bankruptcy Judge Martin Glenn is scheduled to decide on June 18 whether to approve the proposed auctions and name Fortress and Ally as the stalking-horse bidders. Berkshire, based in Omaha, Nebraska, filed court papers this week offering to replace those companies.
Should Glenn approve ResCap's proposals, Berkshire still could bid in the auctions. It wouldn't have the advantages given to the stalking horse, including any breakup fee.
Ally, based in Detroit, supported ReCap's bankruptcy filing as a way to resolve legal claims related to mortgage-backed securities. Ally is 74 percent-owned by the U.S. Treasury after receiving a bailout.
The case is In re Residential Capital LLC, 12-12020, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
