An insurer of some of Residential Capital LLC's residential mortgage-backed securities says ResCap's reorganization plan could stop it from going after the trustees that oversee the securities trusts, Dow Jones Newswires reported yesterday. Syncora Guarantee Inc. said in a court filing on Monday that it should have a legal right to go after the RMBS trustees' claims but won't because of wording in the reorganization plan. "The provisions of the plan that propose to impair or eliminate such rights should not be approved, and as a condition of confirmation the plan should be modified to delete exculpation of the trustees of the Syncora trusts," Syncora said in the filing. Without the "exculpation," Syncora argues, it would be free to go after the claims on behalf of the RMBS trusts. As part of ResCap's larger reorganization plan, the company allowed a $7.3 billion claim for the trusts representing more than one million original mortgages. Syncora, which insures $2.5 billion worth of the RMBS, said that wording in the reorganization plan suggests that insurers — including itself — will be shut out of collecting money from the trusts, even if the trusts get payments from ResCap.
