Residential Capital LLC won what might only be an interim skirmish in a quest to get a federal district court to halt a lawsuit by the Federal Housing Finance Agency against Detroit-based parent Ally Financial Inc. and some of its affiliates, Bloomberg News reported yesterday. The eventual outcome of the suit is important because the agency isn’t part of the global settlement to be implemented through New York-based ResCap’s pending chapter 11 reorganization plan. In its role as conservator of Freddie Mac, the agency sued ResCap, Ally and affiliates alleging there were false and misleading statements in documents related to residential mortgage-backed securities that Freddie Mac purchased. After ResCap filed for bankruptcy, the agency dropped ResCap from the suit. ResCap was Ally’s mortgage-servicing unit. ResCap started a lawsuit in bankruptcy court contending that continuing to sue Detroit-based Ally and other non-bankrupt affiliates was still a violation of bankruptcy’s automatic stay.
