Posted on 10/09/2012 5:42:35 AM PDT by equaviator
From the “how’s that for irony” file comes a report that the judge that signed off on the GM bailout has been having second thoughts, because — surprise, surprise, surprise — he wasn’t informed about part of the deal.
The Washington Free Beacon reports:
As GM teetered on the edge of bankruptcy in June 2009, it cut a $367 million “lock-up agreement” with several major creditors in order to prevent its Canadian subsidiary from going under. The move spared the subsidiary from fulfilling the $1 billion debt it owed the creditors—major hedge funds—ensuring that GM would not have to face bankruptcy courts in two nations, which could have delayed the company’s recovery.
The trustee for (old GM) creditors shortchanged by the government-driven bankruptcy are now suing the hedge funds in a move that could undo the bailout.
“Many U.S. creditors waived their rights to object because the government wanted to push through the bailout for political reasons,” risk analyst Chris Whalen said. “If they had continued through normal channels, they could have easily been in bankruptcy for five years. So they made sure these issues were not adequately briefed before the court.”
The GM that exited bankruptcy was radically different than the one that entered. The Treasury Department arranged for the company to split into Motors Liquidation Co., known as “old GM,” and created a “new GM” with the help of $30 billion from American taxpayers. Judge Robert Gerber, who approved the sale with little hesitation, could now reverse the entire auto bailout—and overturn one of President Barack Obama’s signature achievements.
“When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all,” Gerber said in July.
Well, what do you know, the Obama Administration didn’t reveal all the details to the judge. Is anyone surprised that this gang of Chicago thugs decided that the judge didn’t need to know the sweetheart deal that would save their union buddies?
It sounds like Judge Gerber is ready to reopen the whole thing, essentially forcing GM into a real bankruptcy, including having to pay back the $27 billion to the Treasury… which, given that they only have about $30 billion on hand, could spell the end of GM.
If we’re lucky, this will come apart very soon… just in time for the non-political-wonks to read the news as they’re deciding whether or not Obama deserves a second term.
I still have no idea after reading this, what the hell happened that wasn’t supposed to happen.
I must be dense.
They’ll get to the Judge. It won’t go anywhere.
Also, not a bad October surprise!!!
Excuse the language, but in the words of Slow Joe Biden, this is a truly Big F...ing Deal!
I suspect they will find some way to avoid this. But, if the judge reopens the bailout, GM will be toast. Maybe the secured bondholders will actually get something in return.
And, they still owe 27 billion to you and I (the taxpayers). The "new GM" stock has fallen 40 percent since IPO, and the federal government can't recoup our investment.
MMM
mmmm
mmmmmm
What’s goes around comes around
GM is going down.
Unfortunately, not likely. Once you trace the various article references back to the WSJ source, the last paragraph of that article states:
ping
And it's equally unlikely that the lamestream RATagandists will report on it inside that same time-frame...if at all.
You have to approve the deal before we will tell you what’s in it.
Too bad writers can't write in terms we laypeeples can understand. However, I assume, they can't follow all the labyrinthian twists and turns, either.
However, I like the "feel" of it, whatever it is, LOL.
Leni
Thanks. Every little bit helps.
I know what you mean- but this part seems to clarify a bit:
http://freebeacon.com/general-motors-is-alive-for-now/
“When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all,” Gerber said in July.
Industry experts say GM should be very concerned with the judge’s reaction to the deal.
“The judge has made it very clear that he is greatly dissatisfied with the process,” one analyst said. “He’s basically implying that GM hid it from him and that reopening the sale is a possibility.”
On the other hand, my husband is a Delphi Salaried Retiree member. We have been in court for 2 years to get their pension back. Sloooooooooow process.
Last time the bond holders got screwed.
This time it will be the taxpayers, not the UAW that get screwed. Compliments of 0bama
Sure hope not, I enjoy eating, having a home and generally being happy. This needs to be left alone, because if it gets out prior to the election it will NOT help Romney/Ryan.
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