Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comKey Contacts
Back
GMAC’s Residential Capital is one of the most recent financial services companies to file for bankruptcy after a period of economic hardship. However, creditors in ResCap bankruptcy insist that Ally Financial is on the hook for much of the company’s liabilities, Dow Jones Newswires reports.
In a recent filing with the U.S. Bankruptcy Court in Manhattan, Ally claims ResCap’s choice to sue for between an estimated $20 billion and $25 billion in such liabilities is “premature” and will be difficult for the creditors to win.
“The Committee cannot come close to alleging in good faith, must less establishing, the facts necessary to pierce the veil,” Ally said in its filings, according to the news source.
Ally previously offered to pay nearly $750 million to the troubled financial firm’s bankruptcy estate. However, this settlement was never consummated. ResCap is now seeking a larger amount of damages under the theory of “veil piercing.” Under bankruptcy law, this means Ally and ResCap are alleged to have acted as a single economic unit in which the subsidiary is only utilized to benefit the parent company.
“To read the Committee’s motion, one would think that ResCap never existed–that it never had over 14,000 employees, that it never had over $130 billion in assets,” Ally continued, according to Dow Jones Newswires.
Experts and creditors close to the lawsuit say negotiations between Ally Financial and ResCap are still on-going, but it is not yet apparent if the parties will be able settle and avoid further litigation. An official hearing on the matter is expected in the near future.
If the court found that Ally owes a considerable amount of money to ResCap, it could be very damaging to the company, the Wall Street Journal reports. Roughly three-quarter of Ally Financial is currently owned by the U.S. government and any additional financial setbacks could be detrimental to its outlook.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
New York NDA Requirements for Businesses
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
Author: Dan Brecher
New Jersey Will Contest Grounds Explained
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
Author: Marc J. Comer
Legal Issues Before Bringing on Investors
Bringing on outside investors can provide the capital and strategic support a business needs to grow. However, raising capital also introduces important legal, financial, and operational considerations. Before bringing on investors, businesses should address key legal issues to reduce risk, streamline investor due diligence, and position the company for long-term success. Early preparation signals that […]
Author: Dan Brecher
SECURE 2.0 RMD Planning Strategies
How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]
Author: Marc J. Comer
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses
Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]
Author: Robert L. Baker, Jr.
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.