Residential capital liquidating trust
For core matters, the bankruptcy court could issue appropriate orders and judgments where factual findings would be subject to a more deferential standard of review, and efficiency might dictate that a bankruptcy court decide the case because of its greater familiarity with the facts and issues.
In relevant part, § 157(d) provides that a "district court may withdraw, in whole or in part, any case or proceeding referred [to the bankruptcy court] on its own motion or on a timely motion of any party, for cause shown." To determine if the petitioner has shown cause, the Second Circuit Court of Appeals held that courts should consider "(1) whether the claim is core or non-core, (2) what is the most efficient use of judicial resources, (3) what is the delay and what are the costs to the parties, (4) what will promote uniformity of bankruptcy administration, (5) what will prevent forum shopping, and (6) other related factors." S. Efficiency thus might dictate a single proceeding in the district court. Similarly, the Orion court held that the Constitution prohibits bankruptcy courts from holding jury trials in non-core proceedings, and therefore if there is a jury demand in a non-core proceeding, the district court might decide to withdraw the reference.
In 1982, Residential Funding Company LLC was formed as a subsidiary of Northwest Bank.
In 2005, GMAC (now Ally Financial), a subsidiary of General Motors, transferred ownership of GMAC Mortgage Corporation and Residential Funding Corporation (GMAC-RFC) to Residential Capital Corporation (Res Cap) and contributed billion of equity.
In the RFC-PHH Mortgage agreements, PHH mortgage made representations and warranties concerning the quality of the loans that it sold to RFC. Each of the parties further agrees not to institute any legal actions or proceedings against the other party ...
Each of the parties irrevocably waives the defense of an inconvenient forum to the maintenance of any such action or proceeding and any other substantive or procedural rights or remedies it may have with respect to the maintenance of any such action or proceeding in any such forum.... A, at 3 (Client Contract).) After purchasing the loans from PHH Mortgage, RFC pooled them into residential-mortgage backed securitization trusts ("RMBS trusts") or resold them to whole loan pools.
As a result of its exposure to subprime lending during the subprime mortgage crisis, the company filed for bankruptcy protection in 2012 and underwent liquidation in December 2013.
The Amended Complaint alleges state law claims for breach of contract and indemnification.
PHH Mortgage moves to withdraw the bankruptcy reference and to transfer this case to the United States District Court for the District of Minnesota.
On December 13, 2013, Res Cap filed a complaint against PHH Mortgage in the United States District Court for the District of Minnesota.
A.) The complaint was one of at least sixty filed in that District by Res Cap against entities that had sold loans to RFC.