ResCap bankruptcy considered successful for a subprime lender

Most subprime lenders that went kaput ended up selling off their assets in fire sales, but Residential Capital (ResCap) is telling a different story in bankruptcy, Reuters said Wednesday.

The former mortgage lender is expected to raise at least $4 billion when it auctions off its assets during a bankruptcy auction this month, according to the report.

The article from Reuters claims ResCap, a subsidiary of Ally Financial, is coasting through Chapter 11 bankruptcy with two major bidders – Fortress Investment Group’s Nationstar Holdings   ($28.57 -0.19%)and Berkshire Hathaway   ($0.00 0%). Both firms want to acquire the bankrupt lender’s assets, including ResCap’s mortgage loan servicing and origination businesses.

Proceeds from the sale will be used to reimburse Ally and other investors.

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