GM May Face $918 Million Loss From Bankruptcy Lawsuit
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A trust of unsecured creditors has sued General Motors, claiming that certain hedge funds were favored improperly in a lock-up agreement. And if Bankruptcy Judge Robert Gerber motions the case to go forward, the automaker could see a loss of $918 million.
The case was filed in the U.S. Bankruptcy Court in New York, and is officially titled “Motors Liquidation Company GUC Trust v The Liverpool Limited Partnership et al.” On paper, General Motors Company is not a defendant, but should the judge rule in favor of the hedge funds, the new-found General Motors, LLC. will be held liable to front nearly $1 billion owed by GM Canada to a finance firm based in Nova Scotia that issued notes to the hedge funds.
According to court documents, the lock-up agreement was negotiated with both the involvement of the governments of Canada and the United States, which were, of course, funding GM’s bankruptcy. The creditors’ trust claim that the lock-up agreement was unfair to “Old GM” creditors, and that the deal took place after the bankruptcy filing.
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Think we’ve touched on this one before. Its just seems so incredibly complicated!
OLD news. Obama took the law into his own hands and did what he wanted. He is still the president and I doubt anything will come of it. Now if Obama had lost that would be a different story.
Not sure why I got all the thumbs down. Do people disagree with what I said?
This just broke, how is it old?
Also, Obama didn’t really do anything. It was his team of specialists who are responsible for this.
Any ‘boss’ worth something will take the responsibility for his ‘team of specialists’
The stuff that happened during the bankruptcy is old news. Those that were screwed complaining is old news. They can sue all they want but nothing will happen.
And if the suit does go to court and they win something it should not come from GM. GM was the one that went bankrupt and the US courts decided who should get what of the assets. The money should come from those that got the assets that did not go to the proper entities.
But in rereading the article they are claiming the actions took place after bankruptcy so if true things are going to be real complicated.
GM has generated $16 billion in profits over the last 3 years. Even if they lose, $918 million is only 5.6% of that. It hardly threatens their existence.
Its not about existence anymore but competition. GM and all the other marques need to have every penny they can find to develop and tool new, competitive vehicles as fast as they can to stay ahead of the competitors. There are too many marques competing in the world. We will continue to see consolidation and brands leaving the market.