* Aug. 21 hearing to approve disclosure statement
* ResCap sought Chapter 11 as mortgage liabilities grew
By Jonathan Stempel
July 5 Residential Capital LLC, the mortgage
lending unit of U.S. government-owned Ally Financial Inc
, has filed a bankruptcy reorganization plan that
calls for unsecured creditors to recover 36.3 cents on the
ResCap described the payout in a disclosure statement filed
on Thursday with the U.S. Bankruptcy Court in Manhattan.
The 399-page filing is designed to help creditors vote on
the plan. It said ResCap and its creditors' committee consider
the plan "the best means to fairly and efficiently resolve" the
Chapter 11 case.
Unsecured creditors would recover roughly $779 million of
the $2.15 billion they are owed, and junior secured noteholders
would recover the $2.22 billion they are owed, the filing said.
Paulson & Co, the hedge fund firm run by billionaire John
Paulson, is among the larger unsecured creditors. It is unclear
what the firm paid for its claims.
The proposed payouts are based on a May 13 global settlement
among ResCap, Ally and various creditors, some of which blamed
both entities for ResCap's bankruptcy.
That accord calls for ResCap to receive $2.1 billion from
Ally, which in exchange will receive immunity from legal claims
by ResCap and its creditors.
ResCap sought court protection on May 14, 2012 to address
soaring mortgage liabilities. It had serviced about $374 billion
of U.S. residential mortgage loans before the bankruptcy.
U.S. taxpayers own roughly three-quarters of Ally, which was
once part of General Motors Corp and did not file for bankruptcy
protection. Ally is focusing on auto lending, and trying to
repay roughly $10 billion it still owes the government.
The filing of the disclosure statement follows last week's
release of a report by court-appointed examiner Arthur Gonzalez,
a former chief judge of the Manhattan bankruptcy court.
He found that missteps by Ally had left ResCap
"unreasonably" undercapitalized prior to its bankruptcy filing,
and that ResCap had been insolvent since the end of 2007.
U.S. Bankruptcy Judge Martin Glenn has scheduled an Aug. 21
hearing to consider approving the disclosure statement. Approval
of the Chapter 11 plan could follow within a few months.
The case is In re Residential Capital LLC, U.S. Bankruptcy
Court, Southern District of New York, No. 12-12020.