Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Judge Rules Against ResCap Noteholders, Denounces Legal Tactics
Author: Joel R. Glucksman
Date: November 29, 2013
Key Contacts
Back
A U.S. bankruptcy judge ruled this week that a group of ResCap noteholders are not entitled to interest that has accrued on their claims since the mortgage servicer filed for bankruptcy protection last year.
U.S. Bankruptcy Judge Martin Glenn denied claims made by junior secured noteholders for at least $350 million in post-petition interest. Glenn ruled that the collateral backing $2.2 billion in debt held by the junior secured noteholders was only worth $1.9 billion. Therefore, since their claims are undersecured, the noteholders aren’t entitled to post-petition interest, Bloomberg reported.
The court’s ruling comes ahead of next week’s hearing on ResCap’s plan to exit bankruptcy. Under the company’s proposed plan, it would pay the noteholders all of their principal and normal interest that accrued before the case was filed last year. In his 119-page ruling, Judge Glenn denounced the noteholders’ legal tactics as “unfortunate,” as they were essentially the only creditors opposing ResCap’s plan to exit bankruptcy proceedings. He also added that during the entire course of bankruptcy proceedings, the noteholders have pursued a “strategy where they contest everything and concede nothing (even when the court has questioned whether they are acting in good faith).”
“It should not be lost on anyone that the [noteholders] stand virtually alone in this case in failing to reach a consensual agreement to resolve their issues,” Judge Glenn wrote, according to Dow Jones Business News. “The result has been protracted proceedings that have burdened the estate and reduced funds available to satisfy creditor claims. That is unfortunate.”
ResCap, a subsidiary of Ally Financial, filed for protection under Chapter 11 of the bankruptcy law in May 2012 as litigation over bad mortgage securities grew. Over the course of the proceedings, the company reached agreements to sell mortgage-servicing platforms and loan portfolios through a series of bankruptcy auctions that generated $4.5 billion in proceeds.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Why Compliance Monitoring Matters for NY and NJ Businesses
Compliance programs are no longer judged by how they look on paper, but by how they function in the real world. Compliance monitoring is the ongoing process of reviewing, testing, and evaluating whether policies, procedures, and controls are being followed—and whether they are actually working. What Is Compliance Monitoring? In today’s heightened regulatory environment, compliance […]
Author: Dan Brecher
When Are New Jersey Business Owners Personally Liable for Corporate Debt?
New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
Author: Charles H. Friedrich
Commercial Real Estate Trends to Watch in 2026
Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
Author: Michael J. Willner
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know
Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]
Author: Scott H. Novak
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know
Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]
Author: Scott H. Novak
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business
In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.