Bankruptcy judge confirms ResCap liquidation plan

By The Associated Press | Posted - Dec. 11, 2013 at 11:47 a.m.



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(AP) - A U.S. bankruptcy court judge has confirmed Residential Capital's plan to exit Chapter 11 bankruptcy.

The signing of the order Wednesday marks the court's formal approval and a major milestone in the bankruptcy of the troubled mortgage lending and service company. ResCap filed for bankruptcy protection in May 2012 under the weight of toxic mortgages.

It also closes a messy chapter for Ally Financial, which cut ties with ResCap after the subsidiary filed for bankruptcy protection. Ally is the former finance arm of General Motors that now operates as a bank after a government bailout.

Ally reached an agreement with creditors earlier this year that allowed ResCap to file a liquidation plan.

Ally said Wednesday that the court's approval releases it from all related mortgage claims against the company.

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

The Associated Press

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