Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Judge Rules Against ResCap Noteholders, Denounces Legal Tactics
Author: Joel R. Glucksman
Date: November 29, 2013
Key Contacts
Back
A U.S. bankruptcy judge ruled this week that a group of ResCap noteholders are not entitled to interest that has accrued on their claims since the mortgage servicer filed for bankruptcy protection last year.
U.S. Bankruptcy Judge Martin Glenn denied claims made by junior secured noteholders for at least $350 million in post-petition interest. Glenn ruled that the collateral backing $2.2 billion in debt held by the junior secured noteholders was only worth $1.9 billion. Therefore, since their claims are undersecured, the noteholders aren’t entitled to post-petition interest, Bloomberg reported.
The court’s ruling comes ahead of next week’s hearing on ResCap’s plan to exit bankruptcy. Under the company’s proposed plan, it would pay the noteholders all of their principal and normal interest that accrued before the case was filed last year. In his 119-page ruling, Judge Glenn denounced the noteholders’ legal tactics as “unfortunate,” as they were essentially the only creditors opposing ResCap’s plan to exit bankruptcy proceedings. He also added that during the entire course of bankruptcy proceedings, the noteholders have pursued a “strategy where they contest everything and concede nothing (even when the court has questioned whether they are acting in good faith).”
“It should not be lost on anyone that the [noteholders] stand virtually alone in this case in failing to reach a consensual agreement to resolve their issues,” Judge Glenn wrote, according to Dow Jones Business News. “The result has been protracted proceedings that have burdened the estate and reduced funds available to satisfy creditor claims. That is unfortunate.”
ResCap, a subsidiary of Ally Financial, filed for protection under Chapter 11 of the bankruptcy law in May 2012 as litigation over bad mortgage securities grew. Over the course of the proceedings, the company reached agreements to sell mortgage-servicing platforms and loan portfolios through a series of bankruptcy auctions that generated $4.5 billion in proceeds.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- 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
Crypto Investor Protection: SEC and CFTC Enforcement Trends
Crypto investor protection continues to evolve, with the SEC and CFTC investing resources and coordinating more closely to uphold regulatory standards. Whether you’re a retail investor, an institutional trader, or part of a crypto startup, understanding enforcement trends is essential for navigating this dynamic and high-stakes regulatory environment. Crypto Is No Longer the Wild West […]
Author: Dan Brecher
New Jersey’s Next Manufacturing Tax Credit: Stability Secured, Timing Matters
A Settled Regulatory Environment Enables Confident Capital Planning New Jersey’s new manufacturing incentive program, Next New Jersey Manufacturing Program, enters 2026 with something uncommon in economic development these days: policy stability. The statute is enacted, New Jersey Economic Development Authority’s (“NJEDA”) rules are adopted, and the application portal is open. With the election outcome settled, […]
Author: Michael J. Sheppeard
A Simple Guide to Industry Roll-Up Acquisitions
When done successfully, industry roll-up acquisitions can dramatically grow and strengthen your business. In this post, we break down what an industry roll-up is, why companies pursue it, and what makes it an effective (and sometimes risky) business strategy. What Is an Industry Roll-Up Acquisition? In an industry roll-up acquisition of companies, a buyer acquires multiple companies […]
Author: Dan Brecher
Genesis Mission: How the U.S. Government’s New AI Platform Will Reshape Corporate Innovation, Risk, and Competition
The federal government has launched one of the most ambitious scientific initiatives in decades, and it will redefine how companies develop technology, manage risk, and compete. The Genesis Mission, created by Executive Order and driven by the Department of Energy (“DOE”), is intended to accelerate scientific discovery through a national AI platform that links supercomputers, […]
Author: Michael J. Sheppeard
Stablecoins and the GENIUS Act: How New Global Rules Are Reshaping Compliance
Stablecoins Leave the Grey Zone Stablecoins were supposed to be the “boring” part of crypto: digital dollars that just work. Yet for years they have lived in a regulatory no-man’s-land, classified one day as securities, the next as commodities, and sometimes as something regulators had not even named yet. That uncertainty is finally starting to […]
Author: Bryce S. Robins
Don’t Overlook the Importance of Business License Management
If you operate a business without the proper license, you risk fines, insurance issues, reputational harm, and even business closure. Even innocent mistakes, like forgetting to renew a license, can have significant consequences, such as losing your lawsuit for payment of services that are unlicensed, which makes it imperative to have business license management procedures […]
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.