Paulson, Hedge Funds Could Be Burned By Ally Mortgage Deal

Apr 29 2013 | 3:11pm ET

Ally Financial appears ready to move forward with the reorganization of its mortgage business—without the support of its hedge-fund creditors.

Residential Capital is reportedly close to a deal with some of its creditors that could cut out Paulson & Co., the New York Post reported. The lender last week offered to increase its payment to those creditors at mediation.

A deal could allow ResCap to file a reorganization plan in federal bankruptcy court by a May 7 deadline, and could allow Ally to distance itself from ResCap's troubles.

According to the Post, Ally does not believe it needs the approval of Paulson's creditor group to win the court's approval. Instead, it has been focused on creditors that include monoline insurers and mortgage-backed securities.

Paulson and Appaloosa Management in January urged Ally to back ResCap to ensure a full repayment of RecCap's debts, threatening litigation if it chose not to do so.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of