Dec
06
2012
6

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: (more…)

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