FDIC Says Bankruptcy Stay Doesn't Block Ally Suit

Law360, New York (July 6, 2012, 4:20 PM EDT) -- The Federal Deposit Insurance Corp. asked a New York bankruptcy judge Thursday to dismiss an adversary proceeding filed by bankrupt Residential Capital LLC seeking to bar the agency from suing its Ally Securities LLC affiliate for allegedly violating the Securities Act of 1933 in connection with mortgage-backed securities.

The agency, which is the receiver for two failed banks and filed a separate suit for violation of the Securities Act against 17 issuers and underwriters of mortgage-backed securities that the banks purchased before going under, says ResCap's...
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