The bankruptcy court has scheduled a first day hearing in GM for 4pm today.
GM won't have any trouble meeting its first "Case Milestone;" it has already filed its sale motion. Unfortunately, the requested bidding procedures include the requirement that any bidder assume the agreements with the Unions. While I understand the politics of this, I've previously argued that such a requirement is unnecessary — in a time of limited financing, who is going to be able to take over a company with $27 billion in secured debt? — and including this will just tend to create controversy that could otherwise be avoided.
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One response to “Movin’ Right Along”
The logic seems inconsistent to me; A buyer must take the Union agreements and debt, but can’t take other claims.
67. To facilitate the sale of the Purchased Assets and the resultant
viable New GM, it is necessary to authorize the sale of the Purchased Assets free and
clear of any and all liens, claims, encumbrances, or interests…..
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I look in the unsecured claims section of http://documents.nytimes.com/general-motors-bankruptcy-filing#p=81 and see in billions: 22 Wilm, 20 UAW, 4 Deutsche, IUE 2 etc.
Does the UAW 20 billion count as an “allowed prepetition general unsecured claim” ?
If not, why not ?
I’m wondering if this clause binds: “In addition, in the event the Bankruptcy Court determines that the estimated amount of allowed prepetition general unsecured claims against the Debtors exceeds $35 billion, then the Purchaser will issue an additional 2% of the outstanding common stock of the Purchaser as of the Closing”
Thanks if someone can shed some light on this question.