Ally Hails Judge’s Approval of ResCap Deal

Ally Financial Inc. says the agreement approved by U.S. Bankruptcy Court Judge Martin Glenn “enables all parties involved to move forward to the final stages of ResCap's Chapter 11 cases and resolve the associated mortgage-related issues.”

Residential Capital LLC had asked the judge to approve the $2.1 billion deal with Ally before unveiling a report into the disputes they settled, according to an earlier report.

ResCap has already paid $1.13 billion to Ally to satisfy claims regarding the secured facilities the parent company provided to the mortgage lender.

Ally will contribute $1.95 billion in cash to the ResCap bankruptcy estate, plus the first $150 million in insurance proceeds it is pursuing. In exchange, Ally will get “broad releases” from mortgage-related claims against it related to ResCap. The payment will be made on the effective date of the Chapter 11 bankruptcy plan.