Ally Financial Inc.'s proposed $2.1 billion agreement reached last month with creditors of its bankrupt Residential Capital LLC subsidiary cleared a key court deadline with only one vigorous objection, though several warning shots were fired, Reuters reported yesterday. Ally agreed to the settlement last month to end allegations it stripped ResCap of choice assets including the online lender, Ally Bank, before dumping the business into bankruptcy, which left creditors empty-handed. Syncora Guarantee Inc. insured some of the mortgage-backed bonds issued by units of ResCap, which have fallen sharply in value, and it objected for a variety of reasons. Syncora alleged that ResCap did not explain how it decided to split money from the Ally settlement among different bond insurers. The Department of Justice's bankruptcy watchdog, plaintiffs in a class action and government's pension insurer also objected as the deadline passed yesterday. Several parties also let the court know that while they were not formally objecting, they were taking up positions against the yet-to-be-filed reorganization plan. ResCap plans to file a reorganization plan by July 3 that will explain in more detail how creditors will be paid. A hearing has been scheduled for June 26 before Bankruptcy Judge Martin Glenn to approve the Ally settlement plan.
