GMAC Receives $5 Billion of Bailout Funds

By Christopher S. Rugaber

WASHINGTON -- The Treasury Department said that it will provide $5 billion to GMAC Financial Services LLC, the ailing financing arm of General Motors (GM Quote), in a move that's expected to stave off a bankruptcy protection filing at the company but also severely limit GM's control over it.

In exchange for the slice of the $700 billion bank rescue package, the government will receive preferred shares that pay an 8% dividend and warrants to purchase additional shares in return for the money, the department said.

Treasury also said it will lend up to $1 billion to General Motors so that the company can purchase additional equity that GMAC is planning to offer as part of its effort to raise more capital. ...