Bankrupt ResCap seeks OK to pay $14.9 million to execs, others image

Residential Capital LLC, the bankrupt mortgage lending unit of Ally Financial Inc, asked abankruptcy court to approve $14.9 million in incentive payments to 191 key employees.

From those $14.9 million, 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.

“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.

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 August 8 before U.S. Bankruptcy Judge Martin Glenn in Manhattan. Objections are due on August 1.

In May, Ally’s mortgage subsidiary, Residential Capital, or ResCap, filed for Chapter 11 bankruptcy as bond payments loomed and litigation over soured mortgage securities put pressure on the unit.

The move was intended to allow Ally–which isn’t part of the bankruptcy–to sever itself from those issues by gaining broad releases from litigation claims through ResCap’s reorganization.