Residential Capital LLC, the bankrupt mortgage company indirectly owned by the U.S. government, won interim approval to borrow $1.45 billion to help fund the company's operations, Bloomberg News reported today. Bankruptcy Judge James Peck, who was filling in yesterday for Bankruptcy Judge Martin Glenn in the case, agreed to approve the loan after initially criticizing the request because it asked Peck to make a legal finding that he said he did not have enough evidence to support. The company was in court yesterday seeking emergency approval to refinance two off-shore debt instruments in order to free up cash being held as collateral for the debt. Judge Peck said that he did not have enough evidence to find that a part of the loan transaction involved a "true sale." Judge Peck agreed to approve the transaction after ResCap agreed to remove the request for the finding from the initial loan request. The company will return to court in about 45 days to seek final approval.
