DETROIT – Ally Financial Inc’s. mortgage unit Residential Capital LLC is speaking with private equity firms regarding selling itself to them through a pre-packaged bankruptcy, Bloomberg said quoting people with knowledge of the matter.
Fortress Investment Group, Cerberus Capital Management, Centerbridge Capital and Leucadia National Corp are being contacted by Ally to gauge their interest in the proposal, Bloomberg said.
Ally, formerly known as GMAC Financial Services, is seeking to limit the liabilities at the mortgage unit which is besieged with lawsuits related to its mortgage-linked securities, the report said.
The pre-packaged bankruptcy would allow Residential Capital to reach agreements with creditors and stakeholders before filing for court protection, the report said.
When contacted, Ally said it did not have any comment on the matter.
Last week, the auto and mortgage lender, which is 73.8 percent-owned by the U.S. Treasury after a series of bailouts during the financial crisis, posted a fourth-quarter loss on a $270 million charge to cover expected regulatory penalties levied against its mortgage unit.