Ally Bank 2012 Annual Report Download - page 205

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Contractual Commitments
We have entered into multiple agreements for information technology, marketing and advertising, and voice and communication
technology and maintenance. Many of the agreements are subject to variable price provisions, fixed or minimum price provisions, and
termination or renewal provisions.
Year ended December 31, ($ in millions)
2013 $ 253
2014 and 2015 159
2016 and 2017 74
2018 and thereafter 25
Total future payment obligations $ 511
29. Contingencies and Other Risks
In the normal course of business, we enter into transactions that expose us to varying degrees of risk.
Concentration with GM and Chrysler
The profitability and financial condition of our operations are heavily dependent upon the performance, operations, and prospects of
GM, Chrysler, and their dealers. We have preferred provider agreements that provide for limited exclusivity privileges with respect to
subvention programs offered by GM and Chrysler. These agreements do not provide us with any benefits relating to standard rate financing or
lease products. Our preferred provider agreements with GM and Chrysler terminate on December 31, 2013, and April 30, 2013, respectively.
Mortgage-Related Matters
ResCap Bankruptcy Filing
On May 14, 2012, Residential Capital, LLC (ResCap) and certain of its wholly owned direct and indirect subsidiaries (collectively, the
Debtors) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of New York (Bankruptcy Court). In connection with the filings, Ally Financial Inc. and its direct and indirect subsidiaries and
affiliates (excluding the Debtors) (collectively, AFI) had reached an agreement with the Debtors and certain creditor constituencies on a
prearranged Chapter 11 plan (the Plan). The Plan included a proposed settlement (the Settlement) between AFI and the Debtors, which
included, among other things, an obligation of AFI to make a $750 million cash contribution to the Debtors' estate, and a release of all
existing or potential causes of action between AFI and the Debtors, as well as a release of all existing or potential ResCap-related causes of
action against AFI held by third parties.
The Settlement contemplated certain milestone requirements that the Debtors failed to satisfy, including the Bankruptcy Court's
confirmation of the Plan on or before October 31, 2012. While the failure to meet this October 31 milestone would have resulted in the
Settlement's automatic termination, AFI and the Debtors agreed to monthly temporary waivers of this automatic termination through February
28, 2013. This waiver was not extended beyond this date, and therefore the Settlement has terminated.
As a result of the termination of the Settlement, AFI is no longer obligated to make the $750 million cash contribution and neither party
is bound by the Settlement. Further, AFI is not entitled to receive any releases from either the Debtors or any third party claimants, as was
contemplated under the Plan and Settlement. However, AFI has not withdrawn its offer to provide a $750 million cash contribution to the
Debtors' estate if an acceptable settlement can be reached. As a result of the termination of the Settlement, substantial claims could be brought
against us, which could have a material adverse impact on our results of operations, financial position or cash flows. For further information
with respect to the bankruptcy, refer to Note 1.
Based on our assessment of the effect of the deconsolidation of ResCap, potential obligations as a result of the ResCap bankruptcy, and
other impacts related to the bankruptcy filing, we recorded a charge of $1.2 billion during the year ended December 31, 2012. This charge
primarily consisted of the impairment of Ally's $442 million equity investment in ResCap and an additional $750 million, which is the
amount AFI has offered to contribute to the Debtors' estate. Given the inherent uncertainty of the bankruptcy process, it is possible that the
$750 million estimate could be increased or decreased in the future, but we are unable to estimate the amount of any potential modification.
Mortgage Settlements and Consent Order
On February 9, 2012, we announced that we had reached an agreement with respect to investigations into procedures followed by
mortgage servicing companies and banks in connection with mortgage origination and servicing activities and foreclosure home sales and
evictions (the Mortgage Settlement). Further, as a result of an examination conducted by the FRB and FDIC, on April 13, 2011, we entered
into a consent order (the Consent Order) with the FRB and the FDIC, that required, among other things, GMAC Mortgage, LLC to retain
independent consultants to conduct a risk assessment related to mortgage servicing activities and, separately, to conduct a review of certain
past residential mortgage foreclosure actions (the Foreclosure Review). The Debtors are primarily liable for all remaining obligations under
both the Mortgage Settlement and Consent Order. AFI is secondarily liable for the specific performance of required actions, and is jointly and
severally liable for certain financial obligations. On September 19, 2012, the official committee of unsecured creditors appointed in the
Debtors' bankruptcy cases (the Creditors' Committee) filed an objection to the Debtors' motions to compensate the independent consultants
Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10-K