Reuters: Bankruptcy News: ResCap seeks OK for $14.9 million incentive payouts

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ResCap seeks OK for $14.9 million incentive payouts Jul 18th 2012, 13:49 Wed Jul 18, 2012 9:49am EDT * $4.1 mln sought for executives, $10.8 mln for others * ResCap says payouts needed to preserve value * Hearing set for Aug. 8 July 18 (Reuters) - Residential Capital LLC, the bankrupt mortgage lending unit of Ally Financial Inc, has asked a judge for permission to make $14.9 million in incentive payments to hold onto 191 key employees. About $4.1 million would go to 17 senior executives, not including Chief Executive Officer Thomas Marano, and $10.8 million to 174 other employees, according to a filing late Tuesday with the U.S. Bankruptcy Court in Manhattan. These recipients together comprise roughly 5 percent of ResCap's 3,625-person workforce. ResCap said payments would help maximize the value of the company, encourage executives to take on restructuring and sale-related duties, and help insure that employees with "irreplaceable knowledge" of the business do not leave. It is common for companies in bankruptcy to seek permission for incentive payouts to key employees. A hearing to approve ResCap's proposed payout is scheduled for Aug. 8. Objections are due on Aug. 1. Ally, known mainly as an auto lender, put ResCap under Chapter 11 protection on May 14 as a means of addressing its mortgage-related liabilities. Taxpayers own about 74 percent of Ally, which did not file for bankruptcy, after a series of government bailouts. Ally was once known as GMAC and was part of General Motors Corp. ResCap is selling assets that it hopes will fetch nearly $4 billion for creditors, it said. Nationstar Mortgage Holdings Inc, a unit of Fortress Investment Group LLC, will be the opening bidder for ResCap's mortgage lending and servicing business. Warren Buffett's Berkshire Hathaway Inc will make the first offer for a ResCap loan portfolio. The case is In re Residential Capital LLC, U.S. Bankruptcy Court, Southern District of New York, No. 12-12020. Link this Share this Digg this Email Reprints

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