""Ally Financial Inc."":http://www.ally.com/financial/ announced an agreement that settles any existing and potential claims from Residential Capital--its bankrupt mortgage subsidiary--and ResCap creditors, according to an announcement Tuesday.[IMAGE]
The plan ""fully releases Ally from any claim,"" including representation and warranty claims, that could be brought on by ResCap and its third parties, but makes an exception for securities claims by the Federal Housing Finance Agency (FHFA) and the Federal Deposit Insurance Corporation (FDIC), a release stated.[COLUMN_BREAK]
The Detroit-based company said it believes it has ""strong defenses"" against claims and ""will vigorously defend its position.""
The agreement is subject to approval by ResCap's bankruptcy court and definitive documentation. The release also stated the parties have agreed to keep the terms confidential until ResCap files a motion to approve the agreement, which should happen next week. An amount Ally will pay in the settlement is not subject to further negotiation, according to the release.
""We are pleased to have reached a consensual and comprehensive agreement that enables the company to put the issues related to the mortgage industry behind us,"" said Ally CEO Michael A. Carpenter. ""We remain confident in our strategic direction going forward and in the market position we hold with our leading dealer financial services and direct banking franchises. These franchises are the cornerstones of Ally's future success.""
Third part creditors involved in the settlement included AIG Asset Management, Allstate Insurance Company, Financial Guaranty Insurance Company, Massachusetts Mutual Life Insurance Company, MBIA Insurance Corporation, and Prudential Insurance Company of America.