Berkshire Hathaway offers to buy ResCap unit

[June 12, 2012]  NEW YORK (AP) -- Warren Buffett's Berkshire Hathaway Inc. is offering to buy the mortgage division and loan portfolio of Residential Capital LLC.

Residential Capital, also known as ResCap, is a subsidiary of Ally Financial Inc., the former auto lending arm of General Motors. ResCap, hobbled by soured mortgage loans, filed for bankruptcy protection in May.

In papers filed with the bankruptcy court for the Southern District of New York, Berkshire Hathaway says it will offer more favorable terms for ResCap's mortgage business than Fortress Investment Group LLC has.

ResCap reached a deal last month to sell most of its assets to a group led by Fortress.

Berkshire also says it will offer better terms for ResCap's loan portfolio, which Ally wants to purchase.

Berkshire wants to replace Fortress and Ally as the "stalking horse," or initial bidder, for the assets.

[Associated Press]

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