Still unclear in Tuesday's report by The Post is if and how Ally Bank would get ResCap creditor support for a possible bankruptcy sale to Fortress.
Last fall, Reuters reports indicated that bidders for ResCap included Fortress, Ally Bank's former owner Cerberus and a co-bid from Centerbridge Partners and Leucadia National (LUK).
In December, Bloomberg reported that Berkshire Hathaway (BRK.A) could take an equity stake in the unit, in a pre-packaged bankruptcy where bonds are converted to share holdings. With $500 million in Ally and ResCap bonds, Berkshire is one of ResCap's largest creditors. Overall, the unit's largest bondholder is Pacific Investment Management.
In January, a group of creditors representing $800 million worth of bonds formed a consortium to seek alternatives to a bankruptcy filing that may best preserve their claims. "The Rescap Creditor Group is concerned with media reports that assert that Ally may attempt to abandon Rescap without taking responsibility for Rescap's liabilities," said the creditors in a Jan. 9 statement. "A forced Rescap filing would be a big mistake and create significant litigation against Ally," they added.To be seen is if the reported sale would get support from the creditor group; however, with strategic value to Ally Bank's deposit taking and auto lending businesses and some uncertainty removed from its mortgage unit, asset sales could be a way for the Treasury to have its loans repaid. "
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV