The settlement could yield a profit for unsecured bondholders like Paulson & Co, which will receive $351 million or so, about 35 cents on the dollar for their roughly $1 billion in claims.
While Paulson has not disclosed what it paid for its stake, it likely acquired it at a discount, as the bonds were trading lower than 30 cents on the dollar last May, when ResCap filed for bankruptcy, according to bond tracking program TRACE.
MBIA and FGIC, which insured residential mortgage-backed securities issued by ResCap, stand to get a larger piece of the settlement pie, about $1 billion total. But they have had to pay billions of dollars in claims stemming from the failed securities and may have to pay more in the future.
Other bond insurers would get about $96 million.
Holders of residential mortgage-backed securities - of which there are more than 40,000 among 392 separate RMBS trusts - stand to recoup about $672 million.
The settlement also resolves litigation including a securities class action led by the New Jersey Carpenters Health Fund, which would receive $100 million. A trust created for the benefit of other private securities claimants would receive $226 million.
The case is In re Residential Capital LLC, U.S. Bankruptcy Court, Southern District of New York, No. 12-12020.
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