Ally Financial, a bank formerly known as GMAC, is likely to declare bankruptcy for its mortgage unit, ResCap, in the next three weeks, the New York Post reported. Ally CEO Michael Carpenter has worked to avoid bankruptcy, but sources told the Post that there are no further options.
“I think [Carpenter’s] resigned himself to filing at this point and is just tallying how much it’s going to cost him to pay bankers and restructuring firms [to go through bankruptcy],” an unidentified source told the Post.
A debt payment is due May 14, but Ally doesn’t have the money to make it, the Post said. The pending bankruptcy marks a reversal from reports of ResCap and Ally heading toward an initial public offering, which would have given the bank a $30 million value. [Post]