Buffett Tried to Buy ResCap Before Bankruptcy

May 18, 2012

Billionaire investor Warren Buffett sought to buy Residential Capital (ResCap) from Ally Financial before the U.S. auto and mortgage lender put its home-lending unit into bankruptcy, Bloomberg said, citing three persons familiar with the matter.

The news agency said Warren Buffett, Berkshire Hathaway Inc.'s (BRK.A, Financial)(BRK.B, Financial) controlling shareholder, appointed investment manager Ted Weschler for talks with Ally, quoting the persons who preferred anonymity. Under the deal, Berkshire Hathaway would have taken on potential liabilities such as increasing litigation costs and other claims, while paying nothing upfront for ResCap's assets.

Buffett sought to avoid a ResCap bankruptcy filing because Berkshire had unsecured debt in the mortgage unit, the financial website said, citing the persons.

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