Dec
06
2012

GM bailout *may* be reversed.

Emphasis on ‘may:’ the Washington Free Beacon article is not actually claiming that NY judge Robert Gerber will reverse his approval of the sale; merely that Judge Gerber may do so.  Basically, what happened was that – as part of the original bailout/bankruptcy agreement – GM dumped its existing debt and liabilities into a garbage company (‘Old GM’) while creating a new, liability-free company going forward (‘new GM’).  If any of this sounds familiar, it may be because it was precisely this situation that allowed New GM to stop paying for mercury reclamation from old cars.  The liability for that was handed off to Old GM, which spent two years in lawsuits with various states over this before settling – a settlement that had no effect on New GM whatsoever.  Which is why the company set up the split in the first place, of course.

The problem is that Gerber – who approved the original sale – isn’t actually very happy about any of that:

“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.

“The judge has made it very clear that he is greatly dissatisfied with the process,” one analyst told the Washington Free Beacon in October. “He’s basically implying that GM hid it from him and that reopening the sale is a possibility.”

Put a gun to my head and I’d guess that Gerber will be understandably unwilling to pretty much push a reset button that’s this large; so much so that he’ll find a way not to.  Which is a statement that will undoubtedly annoy at least some of the people reading this, but then again nobody reading this actually has the ability to blow up the American auto industry.  Gerber kind of does at this moment, and if that doesn’t make him kind of thoughtful and careful then we kind of need to get him out of that judgeship anyway…

Moe Lane

PS: Via… sorry, I forget.  Somebody on Twitter.

6 Comments

  • Crawford says:

    Pity about the rule of law. It was nice while it lasted.

    • acat says:

      Ummm .. are you referring to the gang-rape of the rule of law that the GM and Chrysler bankruptcies represented, or the incestuous necrophilia that is old-GM trying to bugger new-GM?
      .
      Not sayin’ any of it’s *good*, mind .. just asking whether you’re offended by one particular part, or the total effect.
      .
      Mew

  • jbird says:

    The number of people who have come out just a few weeks after the election saying, “I didn’t know x”, “I didn’t vote for y” is staggering. Gerber allowed a bankruptcy that illegally screwed over some and grossly benefited others and he wants to say, “I didn’t know! I’m disappointed in the process”? Gerber was the process.

    • earlgrey says:

      The number of people who have come out just a few weeks after the election saying, “I didn’t know x”, “I didn’t vote for y” is staggering.

      For my own piece of mind I hope you are exaggerating.

  • Catseyes says:

    And that’s why the “Right to Work” legislation passed in Michigan. Most of the bond holders for the big three are retired UAW members, as a friend of mine said “It used to be a good investment for a kid who only had a high school diploma”.

RSS feed for comments on this post.


Site by Neil Stevens | Theme by TheBuckmaker.com