Residential Capital LLC, the bankrupt mortgage unit of Ally Financial Inc. (ALLY:US), asked a bankruptcy court to approve $14.9 million in incentive payments to key employees.
The company is seeking to pay 17 senior executives and 174 employees incentives for improving efficiency, meeting financial goals and preserving or enhancing the sale price of ResCap’s assets, according to papers filed yesterday in bankruptcy court in New York. The plan for senior executives doesn’t include Chief Executive Officer Thomas Marano, according to the filing.
“The total potential award payouts represent a reasonable amount, especially when compared with the combined stalking horse bids of nearly $4.0 billion,” ResCap said in the filing, referring to offers for the unit’s assets.
ResCap filed for bankruptcy May 14 with plans to sell most of its assets to Fortress Investment Group LLC and companies it controls. Berkshire Hathaway Inc. (A:US) will make the first offer for the company’s mortgages.
Ally, the Detroit-based auto lender, supported the bankruptcy filing as a way to resolve legal claims related to mortgage-backed securities. Ally is 74 percent-owned by the U.S. Treasury after receiving a bailout.
The case is In re Residential Capital LLC, 12-12020, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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