2012-05-14ft.com

Ally Financial, the lender majority-owned by the US government, placed its mortgage subsidiary Residential Capital into bankruptcy early on Monday in the first attempt by a bank holding company to use the court process to escape a toxic mountain of bad loans.

Mike Carpenter, chief executive, said Ally was also putting its international business up for sale as part of an effort to repay the government and focus on the US auto financing operations.

...

Ally had been aiming for an initial public offering in 2010, using the proceeds to repay the government, but the worsening outlook for its mortgage business caused the flotation to be pulled.


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