Ally Financial Inc. is ‘actively considering’ declaring bankruptcy for its Residential Capital LLC mortgage unit, more commonly known as ResCap.
The Detroit News reports that Ally, which is 74% owned by the U.S. Department of the Treasury, could lose $1.25 billion if it puts ResCap into bankruptcy. ResCap failed to make its April 17 semi-annual interest payment of $20 million on $473 million in unsecured debt that will come due next year. This could lead to default by May 17.
Ally has been unsuccessful in trying to locate a buyer for ResCap, which makes up 10% of Ally's total business.