- From LexisNexis® Mealey’s™ Daily Legal News.
Bankrupt Residential Capital LLC (ResCap) on Aug. 19 moved for approval of a plan to pay a cure amount of $ 287,740.40 to settle an $ 8 million claim against the estate by a loan servicing agency based on assets that were excluded from ResCap’s asset purchase agreement in which it sold its loan service platform (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).
ResCap filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on May 14, 2012.
During the course of the bankruptcy, ResCap conducted an auction for the sale of a loan servicing platform to Ocwen Loan Servicing LLC for $ 3 billion. The Bankruptcy Court approved the sale as part of an asset purchase agreement (APA).
The loan servicing assets auctioned to Ocwen involved another funding source, Impac Funding Corp. and Impac Mortgage Holdings Inc. Although Impac failed to file an objection to the asset sale to Ocwen, it was later revealed that there were certain mortgage servicing agreements involving Impac that were not included in the notice of the asset sale.
ResCap and Ocwen later agreed to amend the APA in connection with the Impac loan servicing agreements that were excluded from notice (referred to as the excluded Impac agreements).
Following the APA amendment, Impac filed a proof of claim in the ResCap bankruptcy for $ 8 million, alleging loan servicing defects against GMAC Mortgage LLC, a wholly owned subsidiary of ResCap.
ResCap contends that assigning the excluded Impac agreements is in its best interest as well as the interests of the bankruptcy estate and the creditors. Based on research and applicable loan records, ResCap argues that the cure amount related to the excluded Impac agreements is $ 287,740.04.
ResCap argues that it is prepared to pay the cure amount to Impac to fully satisfy all of Impac’s claims regarding the excluded Impac agreements and that upon paying the cure amount, ResCap will have no further obligations to Impac.
ResCap is represented by Gary S. Lee, Norman S. Rosenbaum, Alexandra Steinberg Barrage and Jonathan Petts of Morrison & Foerster in New York. Impac is represented by Christopher F. Graham of McKenna Long & Aldridge in New York.