Ally Said to Tap Cerberus

Auto lender asks Cerberus’s Tessler to oversee turnaround efforts.

Ally Financial Inc., the largest U.S. auto lender, tapped Cerberus Capital Management LP’s Lenard Tessler to help oversee turnaround efforts and salvage the government’s $17.2 billion investment, four people with knowledge of the matter said.

Tessler, 59, is a former director of Detroit-based Ally and remains an adviser to the bank’s board. His assignment follows a U.S. suggestion this month that the bailed-out lender name someone to help restructure the money-losing Residential Capital mortgage unit and get Ally’s public stock offering back on course, according to the people, who asked for anonymity because the discussions were private.

ResCap’s Fate

Carpenter, 64, who took over as CEO in November 2009, filed plans for an IPO last March to help repay the bailout. The sale has since stalled, and Carpenter told analysts on Feb. 2 that “realistically, until we’ve made some progress on the mortgage issue, we’re not going to go out into the marketplace.”

Buyers and Bankruptcy

Tim Price, a Cerberus spokesman, and Treasury’s Matt Anderson declined to comment. The agency said in an October report that officials would focus on exiting auto-industry investments, including Ally, “in the months ahead.” At the time of the report, Treasury had received a total of $5.1 billion from dividend payments and the sale of Ally securities.

Confidential Data

In addition to Cerberus, ResCap and its financial advisers have contacted Fortress Investment Group LLC, Centerbridge Capital Partners LLC and Leucadia National Corp. to gauge their interest in purchasing the Minneapolis-based unit, people familiar with the matter said this month.

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