Wednesday, 23 July 2014
Last updated 10 min ago
May 24 2013 | 10:39am ET
Ally Financial has reached a deal with Paulson & Co. and other creditors of its bankrupt subprime mortgage business.
Ally, the former General Motors Acceptance Corp., will pay $2.1 billion to settle allegations by the creditors that it stripped its Residential Capital unit of assets before putting it into bankruptcy protection. The offer is three times what Ally originally proposed to pay the creditors, and seeks to ensure that ResCap can emerge from bankruptcy without further legal headaches for Ally.
"Reaching this comprehensive agreement enables Ally to turn the page on a tumultuous chapter in its history that was severely impacted by the issues in the mortgage industry," Ally CEO Michael Carpenter said.
The deal must still be approved by a court, and while ResCap's hedge fund creditors and others are behind it, some, including Berkshire Hathaway, are not. Berkshire has asked that a report on the alleged asset-stripping be unsealed so that creditors could judge the fairness of yesterday's offer.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…