(Old GM) Motors Liquidation Distributions of Assets Plan

 April 27, 2011 - Update:

Old GM Creditors get New Stock -- Detroit News

By David Shepardson
Apr. 26, 2011
Thousands of creditors of old General Motors have received shares and warrants in new GM.
About 75 percent — or about 112.5 million shares and 200 million warrants — were issued to creditors and bondholders of old General Motors Co., known as Motors Liquidation Co, on Thursday, said Tim Yost, a spokesman for the old GM.
Creditors are to receive a total of 150 million shares of GM stock worth about $4.6 billion, along with warrants to purchase another 15 percent.
The shares and warrants will be distributed to unsecured creditors whose claims have been allowed by the bankruptcy court. For every $1,000 of allowed claims, these unsecured creditors will receive 3.802187 shares, 3.456534 warrants to acquire shares at $10 per share and 3.456534 warrants to acquire shares at $18.33 per share.
At current trading prices, creditors are getting about 24 cents on the dollar for approved claims.
The remainder of GM's stock, including to creditors with disputed claims, likely will be paid in several months.
"Distributing 75 percent of the securities this quickly is truly a remarkable accomplishment, something that many thought could never be done this fast," said Al Koch, CEO of Motors Liquidation and vice chairman of AlixPartners LLP, the turnaround consulting firm that began its work with GM in December 2009
New GM was formed by the sale of old GM's "good" assets to a government-sponsored company as part of a $49.5 billion bailout. The Treasury shrunk its 61 percent majority stake to 33 percent during GM's November IPO, and has recovered $23 billion of the bailout from GM and its sale of GM stock.
With the new shares distributed, the government's stake is now 26 percent.
The government can sell the remainder of its stake after a lock-up period ends May 22.
GM stock is unchanged at $31.14 in moderate trading on the New York Stock Exchange this afternoon.
Motors Liquidation has negotiated the resolution of at least 97 percent, or $284 billion, of the $294 billion in claims that were filed against GM since 2009.
Last month, old GM stock was canceled and made worthless. Old GM stockholders received no recovery from the estate.

 

 

January 10, 2011

Motors Liquidation Distributions of Assets Plan

Many GM retirees have received notices from The Garden City Group relating to administrative proofs of claims. We had legal council review this material and their findings are listed below for all GM retirees to view, not just members.

Until we receive some additional official data from legal council we are posting the following for your information:

"You received a notice of voting ahead of what's called the "Confirmation Hearing" in March (although these are often moved back). This vote and hearing is to approve GM's plan of liquidation; essentially who gets what--by class. For example, the secured creditors will get X recovery under the plan, the unsecured creditors Y, etc. After approval of the Plan, then GM will continue its process of attacking individual claims (such as those filed for benefits lost that weren't really part of the bankruptcy as we discussed long ago). So, in sum, there is nothing to do at this point. If your members filed Proofs of Claim and they weren't objected to, then they will get a ballot to vote. This does NOT necessarily mean that they will get a recovery, this is only whether they have an ability to vote on the plan or not."

In reality, the Plan will probably rise or fall based on the secured creditors' votes, and they are probably going to approve it. This is the next procedural step in the overall liquidation of the assets not assumed. 

The above is for informational purposes only and should not be utilized for your individual situations. We will have additional information to share with all GM retirees in the near future. If you are a claimant, we encourage you to consult with an attorney and other professionals for legal and financial advice concerning your own individual situations. You can also call this number for answers to your questions 1-703-286-6401.

 

 

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