“Judge Set to Rule on Case that Could Reverse GM Bailout”

He could send them back into bankruptcy because the bailout was done illegally. It appears that the original trustees were ignored.

From the Washington Free Beacon:

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.”

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2 Responses to “Judge Set to Rule on Case that Could Reverse GM Bailout”

  1. notamobster says:

    I hope he does reverse it! That begs the question “What happens, if he does?”

    How do you unring the New GM IPO? How do you steal that money back from the UAW retirement fund?

  2. Rockheim says:

    Look for the DoJ to step in and wave their hand..

    “There is nothing wrong with this bankruptcy… These are not the droids you’re looking for.”

    That is if this judge is even permitted to issue a ruling against this..