GM / GMAC That is the Question

GMAC Financial Services said Monday the finance company doesn't intend to seek protection under the U.S. Bankruptcy Code and continues to meet all its obligations.
The Chapter 11 courts must be heartbroken.

General Motors Corp. (GM), which filed for bankruptcy Monday morning, owns 49% of cash-strapped GMAC. The lender got a $5 billion capital infusion under the U.S. Treasury Department's Troubled Asset Relief Program as it became a bank holding company several months ago. I thought TARP stood for something else? See my previous article.

As a creditor of GM, GMAC said it is taking the "appropriate steps" to protect its interests during the auto maker's restructuring. GM has submitted a motion to the bankruptcy court that would allow its direct business with GMAC to continue during the bankruptcy case.

GM's prepackaged plan leaves the federal government in control of a downsized auto maker, faced with the weakest market conditions in a generation.

Last month, GMAC said its first-quarter loss widened as credit woes continued to mount and weak economic conditions hurt results. Still, the company said it was seeing some improvement in mortgage origination, as the beleaguered Residential Capital LLC unit posted a narrower loss but continued to struggle with high credit costs.

So let's talk about something nice rather than the market shall we.

-Christopher Rockey