March 24, 2009 

Joseph P. Vitale, Esq. 

Schulte Roth & Zabel LLP

919 Third Avenue 

New York, New York 10022 

Dear Mr. Vitale: 

This is in response to your request for a determination that Stephen A. Feinberg and the 

entities he controls or advises (collectively, “Cerberus”), which own 51 percent of the equity 

interests of GMAC LLC (“GMAC”), Detroit, Michigan, would not control GMAC under the 

Bank Holding Company Act, as amended (“BHC Act”), if the transactions described below are 

consummated according to certain conditions described in this letter and related correspondence. 

 

Cerberus previously was not subject to the BHC Act because GMAC’s subsidiary insured 

depository institution, GMAC Bank, Midvale, Utah, was an industrial loan company, and such 

companies are exempt from the definition of “bank” under the BHC Act.1

 The Board recently 

approved GMAC’s application to become a bank holding company on the conversion of GMAC 

Bank from an industrial loan company to a commercial bank. 2

In addition to Cerberus’s ownership of 51 percent of the outstanding voting interests of 

GMAC,

 The Board’s approval and the 

determination in this letter have been made in light of the unique circumstances surrounding the 

proposal by GMAC, one of the nation’s largest captive auto finance companies, to become a 

bank holding company and the actions that Cerberus has committed to the Board to implement in 

order to reduce its ownership stake and other relationships with GMAC. 

3

 

1

 See section 2(c)(2)(H) of the BHC Act. 12 U.S.C. § 1841(c)(2)(H).

2

 See GMAC LLC, 95 Federal Reserve Bulletin ___ (December 24, 2008) (“GMAC Order”). 

3

 These equity interests are owned directly by three Cerberus-controlled investment companies, 

FIM Holdings LLC, Cerberus FIM Investors, LLC, and Cerberus FIM LLC (collectively, 

“Cerberus Companies”). The Cerberus Companies are owned by Cerberus-controlled 

investment funds (“Cerberus Funds”); Aozora Bank, Ltd. (“Aozora”), a Japanese bank that is an 

affiliate of Cerberus because Cerberus owns approximately 40 percent of the outstanding equity 

of the bank; and other co-investors not affiliated with Cerberus.

Cerberus has 5 representatives on GMAC’s board of directors. Moreover, various 

investment funds and other entities controlled directly or indirectly by Mr. Feinberg have 

substantial business relationships with GMAC and its subsidiaries. 
- 2 -

Mr. Feinberg has committed to the Board that he will take a number of steps to bring 

Cerberus’s holdings in GMAC into compliance with the BHC Act and the Board’s precedent on 

noncontrolling investments in banks and bank holding companies. 4

 Mr. Feinberg has committed

to cause the Cerberus Companies he controls to distribute the interest each holds in GMAC to 

their respective investors, including the Cerberus Funds and co-investors, by March 24, 2009. 5

 

As a result, the Cerberus Funds and 82 investors unaffiliated with Cerberus will own these equity 

interests in GMAC directly.

6

 No single investor will own or control more than 5 percent of the 

voting interests or equity of GMAC, except the Cerberus Funds, which will own less than 

25 percent of the voting equity. 7

Finally, Cerberus has provided other commitments that are similar to those the Board 

previously has relied on to ensure that an investor is not able to exercise a controlling influence 

over a bank or bank holding company.

In addition, Cerberus has committed to reduce its direct and indirect involvement with 

GMAC. In particular, Cerberus will reduce its director representation from five directors to one 

director. Cerberus also has committed to eliminate any employee interlocks and terminate any 

advisory agreements between Cerberus and GMAC by March 24, 2009. Cerberus has further 

committed that any existing business relationships and transactions between GMAC and 

Cerberus-controlled entities (including other Cerberus portfolio companies) or affiliates of Mr. 

Feinberg or Cerberus will be limited to their existing scope and terms, and no new business 

relationships between GMAC and any Cerberus-controlled entity will be permitted. 

8

For purposes of the BHC Act, a company controls a bank holding company or bank if the 

company (i) directly or indirectly or acting through one or more other persons owns, controls, or 

has power to vote 25 percent or more of any class of voting securities of the bank holding 

company or bank; (ii) controls in any manner the election of a majority of the directors of the 

bank holding company or bank; or (iii) directly or indirectly exercises a controlling influence 

 

 

4

 See “Policy statement on equity investments in banks and bank holding companies” (“Policy 

Statement”). 12 CFR 225.144, available at http://www.federalreserve.gov/newsevents/

press/bcreg/20080922c.htm. 

5

 The Cerberus Funds and certain non-U.S. co-investors currently hold some interests in GMAC 

through a U.S. blocker corporation, which was established to facilitate the payment of U.S. taxes. 

As part of the restructuring, the Cerberus Funds would own a blocker corporation that is separate 

from any blocker corporation that holds a co-investor’s interests in GMAC, and any co-investor 

blocker corporation would be independent of Cerberus and Mr. Feinberg. None of the coinvestors’ blocker corporations will hold more than 4.9 percent of GMAC voting interests. 

6

 The Cerberus Funds that control Aozora would be deemed to indirectly control the GMAC 

shares that Aozora owns. 

7

 Only the Cerberus Funds will own voting equity of GMAC. 

8

 See the appendix for a complete list of the commitments that Mr. Feinberg and Cerberus have 

made to the Board. 
- 3 -

over the management or policies of the bank holding company or bank. 9 The Board’s 

Regulation Y also sets forth several rebuttable presumptions of control. 10

As a result of that distribution, the investments of Cerberus and the co-investors in 

GMAC will be consistent with the thresholds in the Board’s Policy Statement. Cerberus and

Aozora in the aggregate would own or control exactly 22.02 percent of GMAC’s voting equity.

 

Under the proposal, Cerberus would not own, control, or hold with power to vote 

25 percent or more of a class of voting securities of, or control the election of a majority of the 

directors of, any bank holding company or bank. Cerberus would be deemed to control a bank 

holding company or bank under the BHC Act only if the Board were to find that Cerberus 

exercises a controlling influence over the management or policies of a bank holding company 

or bank. 

Cerberus seeks to establish that it does not exercise a controlling influence over a bank 

holding company or bank for purposes of the BHC Act. As indicated, Mr. Feinberg has 

committed to cause the Cerberus Companies he controls to distribute the interests each holds in 

GMAC to their respective investors (Cerberus Funds and co-investors) by March 24, 2009. As a 

result, with the exception of certain Cerberus Funds that own shares of Aozora, these investors

will directly own the shares of GMAC. 

11

 

9

 12 U.S.C. § 1841(a)(2); 12 CFR 225.2(e). 

10 12 CFR 225.31(d). 

11 Cerberus originally committed to the Board that it would not own, control, or hold with power 

to vote securities that (when aggregated with securities that the officers and directors of Cerberus 

own, control, or hold with power to vote) represent 15 percent or more of any class of voting 

securities of GMAC or any of its subsidiaries or 33 percent or more of the total equity of GMAC 

or any of its subs idiaries. The commitments were intended to ensure that Cerberus would not 

control GMAC for purposes of the BHC Act and that Cerberus’s investment would be consistent 

with the Board’s precedent on noncontrolling investments in banks and bank holding companies. 

As noted above, Cerberus will own or control 22.02 percent of the voting equity of GMAC, 

which is below the statutory definition of control in the BHC Act, and will not own any 

nonvoting securities. Thus, the Cerberus investment will also represent less than 25 pe rcent 

of the total equity of GMAC. This revised proposal is consistent with the Board’s Policy 

Statement. Cerberus has re-executed its commitments to the Board to reflect this percentage 

of GMAC’s voting equity that it will own or control. See appendix. Because Cerberus’s 

22.02 percent interest meets the statutory requirements and other guidelines to be a noncontrolling investment under the Board’s Policy Statement, Cerberus’s equity interest in 

GMAC is consistent with Cerberus’s commitments to the Board not to control GMAC. 

 

In addition, no co-investor would own more than 5 percent of the voting equity and total equity

of GMAC. The co-investors would each have the unencumbered right to vote and dispose of 

their respective shares without restriction. There would be no agreements among the 

shareholders regarding the ownership or voting o f the GMAC shares or management of the 

companies. Moreover, neither Mr. Feinberg nor any Cerberus-controlled entity or Aozora would 

advise the co-investors regarding their shares or regarding the management of GMAC. 
- 4 -

In addition, to comply with the BHC Act and Board precedent, Cerberus will reduce its 

direct and indirect involvement with GMAC. Cerberus will reduce its director representation 

from five directors to one director. Consistent with the Board’s Policy Statement, any director 

representative of Cerberus may not serve as the chairman of the board of GMAC or as the 

chairman of a committee of the board of GMAC. Moreover, Cerberus will eliminate any 

employee interlocks and terminate any advisory agreements with GMAC by March 24, 2009, 

will limit any existing business relationships and transactions between GMAC and Cerberuscontrolled entities or affiliates of Mr. Feinberg or Cerberus to their existing scope and terms, 12

 Federal Deposit Insurance Corporation 

and will not undertake new business relationships between GMAC and any Cerberus-controlled 

entity. 

In view of the commitments and representations made by Cerberus and the facts 

described in this letter, the Board has determined that Cerberus would not control a bank holding 

company or bank for purposes of the BHC Act based solely on the proposed restructuring of its 

ownership interest in GMAC. The Board’s determination is specifically conditioned on 

compliance with all the commitments and conditions discussed in this letter and the GMAC 

Order. These commitments and conditions are deemed to be conditions imposed by the Board in 

connection with its findings and decisions and, as such, may be enforced in proceedings under 

applicable law. Any change in the facts presented, including the acquisition by Cerberus of any 

additional voting or nonvoting equity of GMAC, could result in a different conclusion and 

should be reported immediately. If you have any questions about this matter, please contact 

Andrea Tokheim, Counsel (202-452-2300), or Pat Robinson, Assistant General Counsel (202-

452-3005), of the Board’s Legal Division.

Sincerely yours,

(signed)

Robert deV. Frierson 

Deputy Secretary of the Board

Attachment 

cc: Federal Reserve Bank of Chicago

 

12 These relationships and transactions include the provision of loans and lines of credit by 

GMAC to Cerberus-controlled entities, the purchase of loans by GMAC from a 

Cerberus-controlled entity, services provided by a Cerberus-controlled entity to GMAC, and the 

participation by GMAC and a Cerberus-controlled entity in the same lending facilities for 

unrelated third parties. 
- 5 -

Appendix

Commitments of Stephen A. Feinberg and Cerberus to the Board 

Transitional Commitments 

Cerberus1

i. Cerberus will complete the distribution of GMAC ownership interests to certain 

Cerberus investment funds and persons or entities who co-invested in GMAC with 

such funds (“Co-Investors”), consistent with Cerberus's written submissions to the 

Board describing such distribution, in which the interests in FIM Holdings LLC, 

Cerberus FIM Investors, LLC, and Cerberus FIM LLC will be distributed to the 

investors in these entities. After such distribution, Cerberus, including the Cerberus 

funds and any other Cerberus-controlled company (“Cerberus Entities”), shall not 

have any agreements with respect to GMAC with any Co-Investors, and there shall 

not be any agreements among the Co-Investors with respect to GMAC;

commits, in connection with the Board’s determination of noncontrol, that 

within 90 days of the Board’s approval of GMAC’s application under section 3 of the BHC Act 

to become a bank holding company: 

ii. with respect to the investment of a Cerberus Entity or a Co-Investor through a blocker 

corporation, as described in Cerberus's written submissions to the Board, no Cerberus 

Entity shall utilize the same blocker corporation as any single Co-Investor or group of 

Co-Investors. The aggregate GMAC voting interests of any single Co-Investor or 

group of Co-Investors held through a blocker corporation shall not exceed 4.9 percent 

of GMAC's voting interests or 7.5 percent of GMAC's total equity; 

iii. all employees, consultants, and contractors of Cerberus or a Cerberus Entity will 

cease providing services to, or otherwise functioning as dual employees of, GMAC. 

All advisory relationships between GMAC and Cerberus or any Cerberus Entity shall 

also be terminated within this period; and 

iv. any existing business relationships and transactions between GMAC and Cerberus or 

a Cerberus Entity, including any portfolio companies, shall be limited to their existing 

scope and terms, and no new business relationships, including any advisory 

agreements, with GMAC will be permitted. Cerberus employees, consultants, and 

contractors would cease providing services to, or otherwise functioning as dual 

employees of, GMAC or its subsidiaries.

 

1

 Pursuant to applicable Japanese law, Cerberus is not permitted to bind Aozora Bank Ltd. or its 

subsidiaries (collectively, “Aozora”). Therefore, with regard to Aozora, Cerberus commits 

hereby to take all legally permissible actions to attempt to influence Aozora to act consistently 

with this letter and to refrain from taking any actions to influence Aozora to act inconsistently.
- 6 -

Passivity Commitments 

Stephen A. Feinberg and Cerberus Capital Management, L.P., and the entities affiliated 

with either of the foregoing (collectively, “Cerberus Entities”) that directly or indirectly invested 

in equity interests of GMAC, including, b ut not limited to, Cerberus Institutional Real Estate 

Partners, L.P., Cerberus Institutional Partners, L.P., Cerberus Institutional Partners (America), 

L.P., Cerberus International, Ltd., Cerberus Partners, L.P., and Aozora or any affiliated entity 

(collectively, “Cerberus Group”), will not, without the prior approval of the Board or its staff, 

directly or indirectly: 

1. Exercise or attempt to exercise a controlling influence over the management or

policies of GMAC or any of its subsidiaries;

2. Have or seek to have more than one representative of the Cerberus Group serve on 

the board of directors of GMAC or any of its subsidiaries, except that in addition to 

the one representative the Cerberus Group may also have a nonvoting observer;

3. Permit any representative of the Cerberus Group who serves on the board of directors 

of GMAC or any of its subsidiaries to serve (i) as the chairman of the board of 

directors of GMAC or any of its subsidiaries, (ii) as the chairman of any committee of 

the board of directors of GMAC or any of its subsidiaries or, (iii) serve as a member 

of any committee of the board of directors of GMAC or any of its subs idiaries if the 

Cerberus Group representative occupies more than 25 pe rcent of the seats on the 

committee;

4. Have or seek to have any employee or representative of the Cerberus Group serve as 

an officer, agent, or employee of GMAC or any of its subsidiaries;

5. Take any action that would cause GMAC or any of its subsidiaries to become a

subsidiary of Cerberus;

6. Acquire any voting securities of GMAC or any of its subsidiaries in addition to the 

22.02 percent of voting securities of GMAC that Cerberus owns or controls;

7. Own or control any nonvoting equity interests of GMAC or any of its subsidiaries;

8. Propose a director or slate of directors in oppos ition to a nominee or slate of

nominees proposed by the board of directors of GMAC or any of its subsidiaries;

9. Enter into any agreement with GMAC or any of its subsidiaries that substantially 

limits the discretion of GMAC's management over major policies and decisions, 

including, but not limited to, po licies or decisions about employing and compensating 

executive officers; engaging in new business lines; raising additional debt or equity 

capital; merging or consolidating with another firm; or acquiring, selling, leasing, 

transferring, or disposing of material assets, subsidiaries, or other entities;
- 7 -

10. Solicit or participate in soliciting proxies with respect to any matter presented to the 

shareholders of GMAC or any of its subsidiaries;

11. Dispose or threaten to dispose (explicitly or implicitly) of equity interests of GMAC 

or any of its subsidiaries in any manner as a condition or ind ucement of specific 

action or non-action by GMAC or any of its subsidiaries; or 

12. Enter, either directly or through a company controlled by the Cerberus Group

(“Portfolio Company”), into any new banking or nonbanking transactions with

GMAC or any of its subsidiaries, or expand any existing banking or nonbanking 

relationship between GMAC and the Cerberus Group o r a Portfolio Company. 

Notwithstanding the foregoing, within 90 days of the Board’s approval of the 

application by GMAC, all employees and contractors of Cerberus or a Cerberus 

Entity will cease providing services to, or otherwise functioning as dual employees 

of, GMAC. All advisory relationships between Cerberus and GMAC shall also be 

terminated within this period. 

The terms used in these commitments have the same meanings as set forth in the BHC 

Act and the Board's Regulation Y.