GM Back On the Hook?
This case was so under-the-radar it never popped up in any of my Google Alert emails about GM stories. But it won’t stay there:
A New York federal judge may rule imminently on a case that could reverse the General Motors (GM) bailout and send the company back into bankruptcy, according to sources close to the case.
At issue is a backroom deal hatched by GM to fulfill the Obama administration’s demand for a quick bankruptcy, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009.
One condition of GM’s bailout was to shore up its overseas subsidiaries. On the eve of entering bankruptcy, the company cut a $367 million “lock-up agreement” with several major hedge funds to prevent GM Canada from failing. The agreement ensured that GM could spin-off its liabilities to “old GM,” while using a multi-billion dollar bailout to create a new company.
All of that could be reversed if bankruptcy Judge Robert Gerber reopens the process and rules in favor of old GM trustees, who are suing the hedge funds at the center of the lockout agreement.
If GM’s bondholder’s finally end up being made whole, it would go some small way to returning a little bit of certainty to this lawless economy.
Maybe they should go ahead and merge with RIM. They could offer a free PlayBook with every Volt that they have to unload at … um … fire sale prices.
This is a very big deal–not so dramatic, but on a par with the case that limited Lincoln’s revocation of habeus corpus.
like the roberts court will undo the GM bailout. right after it reverses kelo and obamacare
While they’re at it, maybe they can restore those non-union Delphi worker pensions…..
Is Judge Gerber gutsy enough to make the gutsy call?
“If GM’s bondholder’s finally end up being made whole”
With taxpayers’ money, of course. Meaning the taxpayers are screwed over again. The management, the Obama czar, the Big Labor win big time.
Govt. Motor is going bankrupt again anyway, now Obama can blame the judge.
Probably not, bankruptcy judges don’t have life tenure and are always thinking about the job when their contract runs out.
Osama bin Laden is dead! And GM is… ah… they’re dead too.
And you know, of course, that the Left will raise holy hell about “activist judges overturning the rule of the land” if he follows through.
Pass the popcorn, please. This is gonna be sweet!
I’ll take a little butter with my schadenfreude, if you please.