Judge to Rule Whether GM Bankruptcy Favored Hedge Funds Over Creditors

more+
less-

Judge to Rule Whether GM Bankruptcy Favored Hedge Funds Over Creditors

by Joel R. Glucksman on January 18, 2013

Bankruptcy Judge to Provide Ruling

U.S. Bankruptcy Judge Robert Gerber is expected to hand down a ruling shortly on a controversial provision of the 2009 restructuring of General Motors, the results of which may cost GM upwards of $1 billion dollars.

The issue is whether GM unfairly favored hedge fund investors over its unsecured creditors when it entered into a "lock-up agreement" during its restructuring, in which it sent $367 million to a group of hedge funds, according to Reuters. The unsecured creditors argue that this lock-up agreement should be invalidated by Judge Gerber, asserting that it was a secret deal that took place after the company filed for protection under bankruptcy law. As a result, the creditors say that the deal required Gerber's approval before being honored.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Joel Glucksman, Scarinci Hollenbeck | Attorney Advertising

Written by:

more+
less-

Scarinci Hollenbeck on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×