Common use of DESCRIPTION OF THE ACTION Clause in Contracts

DESCRIPTION OF THE ACTION. On December 20, 2006, Plaintiff ▇▇▇▇▇ ▇▇▇▇▇ (together with Frenchola Holden and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇) (collectively, the “Named Plaintiffs”) filed this Action against Defendants GMAC Mortgage, LLC (“GMAC Mortgage”), GMAC Bank (now known, and hereinafter referred to, as Ally Bank), and Cap Re of Vermont, LLC (“Cap Re”) (collectively, “Defendants”) (Defendants together with the Named Plaintiffs, the “Parties”). The Action was filed as a proposed class action. Named Plaintiffs allege that the portions of the mortgage insurance premiums that certain non-party private mortgage insurance providers ceded to Cap Re were disguised kickbacks paid for the referral of private mortgage insurance business. Named Plaintiffs allege that Defendants’ conduct violated Section 8 of the federal Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq. On May 14, 2012, GMAC Mortgage and certain of its affiliates (collectively, the “Debtors”) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). Pursuant to an order of the Bankruptcy Court, the Debtors’ chapter 11 cases are being jointly administered and are styled In re Residential Capital, LLC, No. 12- 12020-MG (the “Chapter 11 Cases”). On July 3, 2013, the Debtors and the Official Committee of Unsecured Creditors filed that certain Joint Chapter 11 Plan Proposed by Residential Capital, LLC, and the Official Committee of Unsecured Creditors (as may be modified, amended or supplemented from time to time, the “Chapter 11 Plan”). On November 19, 2013, the Bankruptcy Court commenced a hearing in connection with confirmation of the Chapter 11 Plan. A copy of the Chapter 11 Plan and related documents is available at ▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇. Defendants deny all of Named Plaintiffs’ claims and deny any wrongdoing and any liability to Named Plaintiffs or any Class Members, in any amount. Defendants contend that Named Plaintiffs’ claims have no merit and that Defendants would prevail in the Action. Class Counsel have investigated the facts and the applicable law regarding the matters raised in the Action. Class Counsel believe that the issues before the Court are complex and are further complicated by the pending Chapter 11 Cases. Given these complications and the uncertainty as to the outcome of the Action, there is a risk that Named Plaintiffs could recover nothing. Absent the Settlement, the Chapter 11 Plan filed by the Debtors, if confirmed by the Bankruptcy Court and once effective, provides the “Ally Released Parties” as such term is defined in the Plan, including Defendants Ally Bank and Cap Re, among other things, a full release of all claims and causes of action related to the Debtors, including the claims alleged in the Action. Therefore, Named Plaintiffs, on behalf of all others similarly situated, have entered into a Settlement Agreement, dated as of December 10, 2013 (the “Settlement Agreement”), which, if approved by the Court, will fully and finally resolve the claims asserted by Named Plaintiffs, on behalf of themselves and anyone else in the Class, as defined herein, against Defendants in this Action in return for the payment of the Settlement amount described below. Capitalized terms used in this Notice but not defined in this Notice shall have the same meanings ascribed to them in the Settlement Agreement, available at www. .com. THIS NOTICE AFFECTS YOU BECAUSE YOU ARE A MEMBER OF THE CLASS DEFINED IN SECTION V BELOW.