The bidding for bankrupt Residential Capital’s (ResCap) business units has become more competitive.
Billionaire Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A, BRK.B) has made a bid to become the initial bidder for ResCap’s mortgage unit and a part of its loan portfolio, Bloomberg noted.
Fortress Investment Group (NYSE:FIG) had planned to purchase the mortgage unit for $2.4 billion.
Berkshire Hathaway has offered to pay the same amount, but said it would cut its breakup fee to $24 million. Fortress is asking for a $72 million breakup fee.
Offering $1.45 billion for the loan portfolio, Berkshire Hathaway topped Ally Financial’s initial offer of $1.4 billion.
The investment company filed its offers with the U.S. Bankruptcy Court. The offers remain open until June 19.
ResCap, owned by Ally Financial, itself 74% owned by the federal government after a bailout during the economic crisis, filed for bankruptcy in May.
Berkshire had tried to purchase ResCap from Ally prior to the bankruptcy filing, hoping to protect $900 million in unsecured debt in the company, sources told Bloomberg.
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