Cerberus Capital Management has expressed concern for the outlook for its US-based subsidiary company GMAC Financial Services, who recently reported a 2007 net loss of US$2.3 billion ($2.6 billion).
Cerberus has a 51 per cent holding interest of GMAC Financial Services.
In a letter to investors, Stephen Feinberg, founder of Cerberus, said the group had developed detailed contingency plans for a worsening environment, Bloomberg News reported yesterday.
“If the credit markets continue to decline and we find ourselves in a prolonged environment of capital market shutdown, GMAC could run into substantial difficulty,” Feinberg wrote.
GMAC said last week that the loss stemmed from continued disruption in the mortgage, housing and capital markets on its residential mortgage business ResCap.
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