Ally Deal Has Paulson's Backing

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.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…