Residential Capital LLC, the defunct mortgage company, opened a weeklong bankruptcy trial in which it will fight hedge funds including Aurelius Capital Management LP over a liquidation plan that resolves more than $100 billion in claims, Bloomberg News reported yesterday. The company is asking Bankruptcy Judge Martin Glenn to approve a plan to distribute billions of dollars to creditors that ResCap raised by liquidating assets. The assets included a mortgage platform bought by Ocwen Loan Servicing LLC and Green Tree Servicing LLC for $3 billion. All the company’s big creditors voted for the bankruptcy plan except for a group of hedge funds holding about $1 billion in notes, ResCap’s lead attorney, Gary Lee, said today in court. ResCap, which is owned by Detroit-based Ally Financial Inc., filed for bankruptcy in May 2012 with plans to sell its mortgage unit and other assets. The company completed those sales this year, raising about $4.5 billion.
