For Residential Capital Corp. the shinola hit the fan on Tuesday. Early this morning ResCap filed a notice with the SEC saying it missed a scheduled payment on its debt Tuesday, laying the ground work for an eventual default – that is, if the payment is not made up within 30 days. ResCap/GMAC, of course, is owned by Ally Financial, which just so happens to be controlled by the U.S. Treasury Department, which falls under the control of the White House. If you’ve been wondering why ResCap has been watching its pennies lately and closing mortgage divisions, now you know why. But the big question remains: Will Treasury have Ally downstream money to ResCap so the bond payment can be made up? If ResCap has to go through a chapter 11 filing can Ally ever go public? Will this embarrass the White House and will the GOP make an issue of Ally? Questions, questions, questions…
By
APR 17, 2012
Comments (2)
Why was this place(gmac) ever bailed out by Treasury anyway? it wasn't too big to fail and didn't have any systematic risk. they should have let it go bankrupt,wiped out shareholders, have bondholders fight over scraps and recapitalized a new debt free auto finance company for government motors called gmac 2? ....oh yeah i forgot- gmac, chrysler and chrysler credit were 50% owned by cerebus capital, a private equity co, who had Dan Quayle and ex Treasury sec Snow on their board.
Amen Tea Party!
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