Ally, ResCap creditors reach settlement

Tue May 14, 2013 11:57am EDT

Related Topics

(Reuters) - Bankrupt Residential Capital LLC said on Tuesday that parent Ally Financial Inc reached a private settlement with ResCap creditors, who say Ally owes them $25 billion.

The deal will keep sealed a potentially damaging report on Ally's role in ResCap's collapse.

A deadline to release the report by examiner Arthur Gonzalez had initially been set for 11 a.m. EDT (1500 GMT) if the sides could not reach a deal. Creditors had lambasted an initial offer by Ally to contribute $750 million for ResCap creditors.

Lewis Kruger, ResCap's chief restructuring officer, said after a hearing in U.S. Bankruptcy Court in Manhattan on Tuesday that a term sheet between Ally and the creditors had been signed. The sides still had to work out details on how to implement its terms, Kruger said.

Details of the deal remained private. The examiner's report will remained sealed until May 23, Kruger said.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe)

FILED UNDER: