Residential Capital, the mortgage arm of Ally Financial, says Warren Buffett’s Berkshire Hathaway Inc. (BRKA, BRKB) made an offer to buy all of ResCap’s equity for $1 before the mortgage servicer was put into bankruptcy last month.
Residential Capital, also known as ResCap, is a subsidiary of Ally Financial Inc., the former auto lending arm of General Motors. ResCap was hobbled by payments on debt taken out to finance soured home mortgages.
In a Thursday filing with U.S. Bankruptcy Court in Manhattan, ResCap said government-owned parent company Ally Financial Inc. received the $1 offer in April, but Berkshire never showed interest in becoming the “stalking-horse” bidder for ResCap assets.
A Berkshire Hathaway spokesman didn’t immediately respond to a request for comment about the $1 offer.
ResCap filed for bankruptcy last month with a plan in place for Nationstar Mortgage Holdings, owned by Fortress Investment Group, to make a $2.4 billion minimum offer for its mortgage servicing assets.
Ally, the former financing arm of General Motors Corp , is not in bankruptcy.
Ally, which is 74% owned by the U.S. government, makes loans to GM and Chrysler customers and finances dealer inventories. The government first bailed out the company, then known as GMAC, in late 2008 as part of the Bush administration’s aid to the auto industry. The Obama administration provided additional funding in May and December 2009.