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
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Author: Donald M. Pepe
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
Author: Marc J. Comer
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Author: Jay McDaniel
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls
For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]
Author: George McGowan
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Author: Donald M. Pepe
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Author: Donald M. Pepe
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.