As appeared in The Wall Street Journal
Dow Jones reported that Residential Capital LLC, the bankrupt mortgage subsidiary of Ally Financial Inc., was seeking to delay mortgage-securities litigation against its parent company, several affiliated businesses and former executives. ResCap filed suit against several financial services firms, arguing those firms’ claims should be put on hold during the ResCap bankruptcy.
“Bankruptcy courts often will grant stays for litigation pending against company executives and affiliated businesses if such matters could distract a debtor or deplete the value of its estate, said Madlyn Primoff, a Bankruptcy and Restructuring Partner with the law firm Kaye Scholer.
“However, the court is unlikely to agree to put litigation against non-debtor affiliates on hold for the duration of a bankruptcy at the beginning of a case. Such a delay may be viewed as too ‘aggressive’ by the plaintiffs in pending litigation,” Primoff added.
Also of Interest
- Benchmark Litigation Recognizes Kaye Scholer Practices and Partners Nationwide October 24, 2016 • Recognitions
- What’s Really Remarkable about the Appeals Court Ruling on the CFPB October 20, 2016 • Articles
- IFLR1000 Recognizes Kaye Scholer’s Global Presence, Practices and Lawyers October 19, 2016 • Recognitions
- Winning the War: Strategies for Prevailing in Consumer Fraud and False Advertising... October 17, 2016 • Articles
- Kaye Scholer Clients Achieve Nearly Full Recovery in Arch Coal Chapter 11 Proceeding October 14, 2016 • Client Successes
- 3D Printing: New Legal Issues Emerge with the Technology’s Revolutionary Potential October 10, 2016 • Articles
- Consumer Products in the Age of Big Data October 4, 2016 • Articles
- Antitrust Jurisprudence in the Second Circuit October 1, 2016 • Articles
- And Now A Word From The Panel: 3 Alternatives To MDLs September 28, 2016 • Articles