By on July 18, 2013

ss_homepage

Ally Financial, what used to be known as the General Motors Acceptance Corporation, GMAC, before GM’s bankruptcy and bailout, itself received over $17 billion from the U.S. Treasury during the bailouts of 2009. On Tuesday the company said that it was looking into options on how to repay that money and comply with the Federal Reserves’ latest stress tests for financial institutions. Ally is 74% owned by Treasury and it is trying to buy back some taxpayer-owned stock and reach an agreement with the Fed on its capital structure (known as the “Comprehensive Capital Analysis and Review”) so it can offer stock in an IPO. Ally had originally planned on a 2011 IPO but having to resolve claims against its bankrupt Residential Capital mortgage unit delayed that. ResCap hopes to be out of bankruptcy by 2014.

More recently, in March the Fed said that Ally didn’t have enough capital, should there be another economic meltdown. Ally objected and they’re trying to come up with a plan that will get the Fed’s blessings.

In a filing with the SEC, Tuesday, Ally said that they are “exploring a number of alternatives in furtherance of repaying Treasury and supporting its Comprehensive Capital Analysis and Review resubmission to the Federal Reserve Board, including a possible primary issuance of common stock by Ally, and the use of available cash (and the proceeds of any stock issuance by Ally) to address Treasury’s mandatorily convertible preferred shares. No decision has been made to pursue any approach under consideration and the implementation of any such approach may require regulatory and other approvals.”

In a related matter, Ally won a small legal victory. In its role as conservator of Freddie Mac, the Federal Housing Finance Agency sued Ally, ResCap and affiliates alleging that there were false and misleading statements in documents concerning mortgage-backed securities that were bought by Freddie Mac. When ResCap filed for bankruptcy last year, the FHFA dropped them from the lawsuit but pursued it against Ally.

Ally responded by having ResCap sue the agency, claiming that to sue Ally and other non-bankrupt affiliates was a violation of bankruptcy’s automatic stay. The Bankruptcy Code in the U.S. automatically halts lawsuits against bankrupt companies.

A federal district court judge ruled that FHFA’s lawsuit against Ally could proceed and ResCap appealed, resulting in Tuesday’s ruling from the U.S. Court of Appeals that kicked it back to district court, instructing that judge that “automatic stay may apply” to non-bankrupt affiliates “in some limited circumstances”, that the stay would apply if the FHFA’s lawsuit would have “immediate adverse economic consequences” on ResCap, that the lower court should make “explicit findings” on the matter of if continuing the suit against non-bankrupt affiliates would have such consequences on ResCap.

What the lower court may do is not clear, particularly because things have changed since ResCap’s suit was filed. Since then the mortgage unit has reached a settlement with all of it’s creditors and has filed a reorganization plan under Ch. 11 of the bankruptcy code that is up for court approval next month. That plan involves Ally paying $2.1 billion to ResCap’s creditors.

Get the latest TTAC e-Newsletter!

3 Comments on “Ally Financial Explores Options For Treasury Exit, Seeks Immunity From ResCap Related Lawsuit...”


  • avatar
    highdesertcat

    oy vey iz mir, oh weh!

  • avatar
    Lorenzo

    At least the government got its money back from Chrysler Financial Services. Fortunately, they stayed out of residential mortgages.

  • avatar
    sealed

    CXL-I appreciate for your kind and generous sharing.Shop online at christian louboutin mall for a great selection of christian louboutin boots, christian wedding shoes,christian louboutin ankle boots and sandals for girls,women and men with free shopping on all orders.Welcome to luxury christian louboutin sale online store.The best christian louboutin at best price, free delivery,easy returns & exchanges,100% quality guarantee!Save 82% Off.Cheap christian louboutin daffodile makes a woman’s feet dazzle and shine even after the twelve strikes of midnight.Own a pair of stylish and wonderful christian louboutin is women’s lifetime pursuit. We offer christian louboutin shoes online shopping by an elegant but easy way. Shopping online at discount price for red sole signature designer.
    christian louboutin sale is french hot brand in the world,We provide different kinds of christian louboutin.Choose the woman wearing louboutin slingback,often has realised that many men somehow to high-heeled shoes have deep interest,wear cheap christian louboutin sales shoes can easily outright conquest many men,can easily get many men worship,can easily make many men excited.In fashionable arena occupies a place of christian louboutin ankle boot forever and always makes women fascination.christian louboutin outlet
    foot that one wipe enthusiastic red,no matter how plain clothes,they were unable to hide the hostess as fire the lively personality.christian louboutin shoes is fashionable and beautiful, recently new appearance of new women’s sandals,presenting an one colour profusion,design and material collocation also ingenuity, pretty,both restoring ancient ways,full of female lasting appeal,sweet call a person fondle admiringly
    NIKE name, in the eyes of Westerners was very lucky, easy to read and easy to remember,it is known.nike shoes trademark symbol of the Greek goddess of victory wings of feathers,representing the speed, but also represents a dynamic and gentle.nike australia‘s trademark,the pattern is a small hook shape concise,rapid as lightning,and a look reminiscent of the speed and explosiveness of nike shoes australia.For the first time named “Nike” athletic shoes, soles square convex tablets to enhance the stability, the body of the shoe on both sides of the knife-shaped curved hook,a symbol of the wings of the goddess.God’s wings.nike shoes online store for Australian consumers,sell cheap nike shoes.Our aim is to let people around the world dressed in Nike.
    Nike as a historic brand is popular in all over the world,nike australia occupies a very important position. No matter what age the person will have a pair of nike shoes. This shows that people love the Nike.nike shoes australia‘s success depends largely on accurate market positioning and excellent quality. A lot of people are eager to buy cheap nike shoes, stores often only discount after last season’s, how to buy a pair of cheap Nike? Now you can come to nike shoes online store. You can buy an ultra-low price of one pair of the latest nike free,Or the girls favorite nike heels!
    The spring came again, if you have love to choose a pair of christian louboutin shoes right now? christian louboutin pumps daffodile match herve leger bandage will make you a shine at the moment.Don’t do the most brilliant and also don’t do the lowest. christian louboutin sandals with its own language, confided women the curve of the gentle, sending out the mature female charm. herve leger replica a fair maiden temperament, both costly and qing li, both charm and cute. Thank you for giving the awesome suggestions for us to order. summer comes, want to follow the trend of the front line, still please read the article. christian louboutin sale and clothes, the fire and herve leger dress is popular all over the world. Women like the bandage as the sexy details, they use replica herve leger bundle out of sexy figure concave and convex have send.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States