ResCap holders organize to recover $800 million bonds at par

By Susanna Moon

Chicago, Jan. 10 - Residential Capital LLC bondholders have banded together to protect their assets amid speculation that parent company Ally Financial Inc. will force the unit into bankruptcy, according to the group's attorney, White & Case.

The bondholders include institutional holders and secondary holders with more than $800 million of ResCap secured bonds.

The group will work with Rescap and its advisors to ensure that secured holders will receive the par recovery of their bonds, the release noted.

"Ally, Ally Bank and Rescap are too intertwined to be easily unwound," Gerard Uzzi of White & Case said in the release. "A forced Rescap filing would be a big mistake and create significant litigation against Ally."

ResCap is a New York-based real estate finance company. Ally Financial is an automotive lender based in Detroit.

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