Ally Puts ResCap Rumors To Rest With Prepack Ch. 11

Law360, New York (May 14, 2012, 1:29 PM EDT) -- Ally Financial Inc. on Monday ended months of speculation about the fate of Residential Capital LLC by placing the star-crossed mortgage unit into a prepackaged bankruptcy and selling most of its assets to Fortress Investment Group LLC.

ResCap and 50 of its subsidiaries filed Chapter 11 petitions in New York federal court, listing $15.7 billion in assets and $15.3 billion in debt. The move allows Ally to shed ResCap, a financial and legal liability whose failure to make a major bond payment April 17 raised bankruptcy...
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