Ally Financial Inc., the auto lender majority-owned by the U.S. government, agreed to pay $2.1 billion to avoid lawsuits related to its bankrupt mortgage unit, Residential Capital LLC, Bloomberg News reported yesterday. Under the settlement, Ally will pay $1.95 billion in cash to the ResCap bankruptcy estate, plus $150 million in insurance proceeds, according to a court filing yesterday. The money will be added to the $4.5 billion that ResCap raised by selling its mortgage-servicing business and a loan portfolio and will eventually be distributed to creditors owed at least $6.3 billion under a reorganization plan supported by Detroit-based Ally.
