Ally: ResCap plan to be confirmed; effective date expected within week

By Caroline Salls

Pittsburgh, Dec. 11 - Residential Capital, LLC's plan of reorganization will be confirmed by the U.S. Bankruptcy Court for the Southern District of New York, according to an Ally Financial Inc. news release.

Ally said the parties expect the plan to take effect within the next week.

According to the release, the confirmation order will mark the court's formal approval of broad releases for all mortgage-related claims against Ally and its subsidiaries, subject to limited exceptions.

"This marks a key milestone for Ally, and the ResCap chapter in our history is officially behind us," Ally chief executive officer Michael A. Carpenter said in the release.

"Confirmation of the ResCap plan offers broad and permanent releases of substantially all past, present and future mortgage-related claims, which is a key point of progress for Ally in achieving nearly complete closure for mortgage liabilities."

Residential Capital, a New York-based mortgage originator and servicer, filed for bankruptcy on May 14, 2012. Its case number is 12-12020.

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