ResCap Plan Offers Some Recovery To Unsecured Creditors

Law360, New York (July 8, 2013, 3:33 PM EDT) -- Residential Capital LLC on Thursday submitted a reorganization plan that, if approved by the court, will guide the collapsed mortgage servicer out of bankruptcy and repay unsecured creditors an estimated 36 percent of their alleged losses.

The plan incorporates the recently approved $2.1 billion settlement with creditors and ResCap’s former parent Ally Financial Inc., which protects the government-backed auto lender from liability related to its former mortgage servicing arm’s downfall. ResCap’s lawyers hope to see the plan confirmed by a bankruptcy court before the end of...
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