Fortress Investment (FIG) in 'Exclusive' Talks to Buy Marred Ally Financial Mortgage Unit
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Fortress Investment Group (NYSE: FIG) shares are trading strong Friday following reports the company's Board might be in talks to acquire a defunct mortgage issuer.
Ally's Residential Capital filed for bankruptcy in late 2009 and Ally has been looking to unload the asset at least since early February. Reports suggest Fortress and Cerberus Capital are in potential talks for the unit.
Friday's report from the NY Post said Fortress is in "exclusive" discussions with ResCap, though not much more was released. Should Fortress (or Cerberus) strike an agreement, the U.S. government might be able to recoup a sizable portion of the $12 billion is still has invested in ResCap, according to the Post.
Whichever deal happens, noted hedge fund men like John Paulson and David Tepper -- both who are secured creditors to ResCap -- could be brawling with Warren Buffett -- an unsecured creditor -- about the distribution of funds. Fortress would be able to acquire ResCap in a "363 deal," which would see Fortress by the assets of ResCap and not the liabilities.
There's still a chance Ally might be able to off ResCap in an out-of-court sale. Ally CEO Michael Carpenter might be feeling pressure from the Obama administration not to let the sale go through in a bankruptcy process. Further, the Post cited people in the know who said Ally may have written enough of ResCap off not to take a loss on the sale -- or a sizable one, anyway.
Shares of Fortress are up about 1.3 percent on the session Friday.
Ally's Residential Capital filed for bankruptcy in late 2009 and Ally has been looking to unload the asset at least since early February. Reports suggest Fortress and Cerberus Capital are in potential talks for the unit.
Friday's report from the NY Post said Fortress is in "exclusive" discussions with ResCap, though not much more was released. Should Fortress (or Cerberus) strike an agreement, the U.S. government might be able to recoup a sizable portion of the $12 billion is still has invested in ResCap, according to the Post.
Whichever deal happens, noted hedge fund men like John Paulson and David Tepper -- both who are secured creditors to ResCap -- could be brawling with Warren Buffett -- an unsecured creditor -- about the distribution of funds. Fortress would be able to acquire ResCap in a "363 deal," which would see Fortress by the assets of ResCap and not the liabilities.
There's still a chance Ally might be able to off ResCap in an out-of-court sale. Ally CEO Michael Carpenter might be feeling pressure from the Obama administration not to let the sale go through in a bankruptcy process. Further, the Post cited people in the know who said Ally may have written enough of ResCap off not to take a loss on the sale -- or a sizable one, anyway.
Shares of Fortress are up about 1.3 percent on the session Friday.
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