Bankruptcy Judge Martin Glenn yesterday approved a settlement in which the U.S. government-owned Ally Financial Inc., formerly the finance arm of General Motors Co., will pay $2.1 billion to its bankrupt unit Residential Capital LLC, Reuters reported. Judge Glenn also said that he will unseal a report by a bankruptcy examiner probing Ally's role in ResCap's collapse. The report had been sealed as the parties hashed out a settlement. The deal is a key step in ResCap's eventual exit from chapter 11 protection. The settlement also will help Ally focus on its core business of auto lending and on repaying the U.S. government roughly $10 billion outstanding on a $17 billion loan for a bailout during the financial crisis.
