Buffett Said to Have Pursued ResCap Purchase Before Bankruptcy

Billionaire Warren Buffett sought to buy Residential Capital from Ally Financial Inc. before the government-owned company put the home lender in bankruptcy, according to three people familiar with the matter.

Buffett assigned former hedge-fund manager Ted Weschler to negotiate an offer with Ally, said the people, who requested anonymity because the talks were private. Buffett’s Berkshire Hathaway Inc. would have paid almost nothing upfront for the assets, while taking on potential liabilities such as mounting litigation costs and other claims, the people said.