Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Court Grants ResCap Extension to File Reorganization Plan
Author: Joel R. Glucksman
Date: May 23, 2013
Key Contacts
Back
A U.S. Bankruptcy Court has granted Residential Capital’s request for a 30-day extension in filing its reorganization plan. During this period, the company will be unencumbered by the risk of rival proposals.
In a U.S. Bankruptcy Court in Manhattan, Judge Martin Glenn addressed the progress that’s already been made in the contentious and ongoing bankruptcy dispute, and agreed with ResCap’s representatives that an extension may give the firm more time to settle disputes with creditors and its parent company, Ally Financial.
“The ongoing mediation is the single most important factor in supporting the extension of exclusivity,” said Glenn. “All of the effort needs to be concentrated on negotiations between the parties, with or without the mediator.”
In addition to granting the company more time to develop a plan, Judge Glenn also overruled objections from junior bondholders seeking $2 million in claims and more control over ResCap’s bankruptcy proceedings, according to Dow Jones Newswires. ResCap, Ally and creditors are expected to either agree to a global settlement or walk away with a deal in place by the end of the week. If Ally and a committee of creditors fail to reach an accord with ResCap and drop lawsuits, the distressed mortgage firm will use the 30-day extension to develop a reorganization plan that attempts to resolve as many issues as possible.
The mediation among ResCap, Ally and the creditors also aims to determine Ally’s financial responsibilities toward ResCap for actions it took prior to the latter filing for bankruptcy. Creditors claim that Ally and ResCap acted as a “single economic entity” prior to bankruptcy law proceedings, and therefore Ally should be required to pay a portion of ResCap’s debt. Originally, Ally proposed a $750 million payment to avoid potential lawsuits, but creditors dismissed the figure as too low.
If the negotiations fail, the three parties must find another path to determine how to manage $40 billion in claims relating to sour mortgage-backed securities, according to American Banker.
- Practices: Corporate Transactions & Business
- 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
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: George McGowan
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Author: George McGowan
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
Author: George McGowan
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.