ResCap Fights To Subordinate Insurers' Securities Claims

Law360, New York (February 20, 2013, 4:07 PM EST) -- Residential Capital LLC filed an adversary suit against a slew of insurance companies and asset management companies in New York bankruptcy court on Tuesday seeking to subordinate the companies' so-called investor claims tied to $226 billion in allegedly faulty mortgage-backed securities.

ResCap's suit seeks an order subordinating the claims of 30 companies seeking payment tied to losses on securities they bought and sold to investors, saying their claims were duplicative and and would reduce the payout due to general unsecured creditors.

Subordinating the claims would prevent...
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