News sources say that a financial giant is in the process of exploring Chapter 11 bankruptcy. The board of Ally Financial Inc’s Residential Capital unit is meeting to talk about the company’s pre-bankruptcy status and how it will convince its creditors to agree to the filing should it move forward. The company already has an interested party that is willing to open with a bid of $2 billion to buy some of Residential Capital’s assets as well as settle its debts. Ally Financial would then liquidate its remaining assets to increase cash flow.
While these financial talks are in place, another group, Barclays PLC, is arranging for debtor-in-possession financing for the amount of $1.45 billion. This will keep the organization operational until the bankruptcy filing has been completed, at which point the facility will be sold to investors. After years of losses as the former lending group for General Motors, Ally was forced to assess its own finances. Once the Residential Capital unit is eliminated, Ally can focus on its primary business of auto financing say sources within the company. If your business is on the verge of filing for Chapter 11, take the time to speak with a San Antonio bankruptcy lawyer now by contacting the Malaise Law Firm to arrange an initial consultation.