Bondholders say allowing Residential Capital LLC to retain control of its stalled restructuring is "the surest path to nuclear war" and urged a judge to allow creditors to propose rival restructuring plans, Dow Jones Daily Bankruptcy Review reported yesterday. A group of junior secured bondholders is asking a bankruptcy judge to deny ResCap's request for a three-month extension of its exclusive right to file the restructuring plan describing how it will pay creditors, settle disputes and exit chapter 11 protection. According to the bondholders, the request is based on the "false assumption" that ResCap's long-running restructuring negotiations will result in a breakthrough that will take the mortgage lender out of bankruptcy. The bondholders say that the plan talks, which have gone to mediation with a sitting bankruptcy judge, have only further entrenched warring creditors in their respective positions.
