| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers R > Headlines for Residential Capital LLC > News item |
Residential Capital enters stipulation on cash collateral termination
By Caroline Salls
Pittsburgh, June 14 - Residential Capital, LLC, its junior secured noteholders and lender Ally Financial Inc. entered into a stipulation that governs the terms of ResCap's cash collateral use, according to a June 14 filing with the U.S. Bankruptcy Court for the Southern District of New York.
According to the filing, ResCap's debtor-in-possession financing and cash collateral order was amended through the stipulation so the court can consider a cash collateral motion at a June 26 evidentiary hearing.
Under the stipulation, ResCap's right to use pre-bankruptcy collateral, including cash collateral, will automatically terminate without further notice or court order on the effective date of a plan of reorganization, for any ResCap debtor, on June 27 or upon written notice of a termination event.
The ResCap debtors can use cash collateral from June 13 through June 27 under the stipulation, but only to pay cash collateral costs and make adequate protection payments.
However, to the extent the debtors use unencumbered funds during the extension period for specified purposes, they will have the right to replenish those unencumbered funds from cash collateral in connection with the entry of an order granting the cash collateral motion.
The company said the adequate protection parties will reserve the right to argue that any replenishment must be sought by separate motion.
On May 14, the court approved a stipulation that limited the ResCap debtors' ability to continue using cash collateral and extended the termination date to the effective date of a plan for any debtor, June 12 or upon notice of termination events.
Residential Capital, a New York-based mortgage originator and servicer, filed for bankruptcy on May 14, 2012. Its case number is 12-12020.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.