New Objections May Delay G.M. Exit From Bankruptcy


Published: June 19, 2009

A group of General Motors bondholders and some of the automaker’s labor unions filed objections on Friday to G.M.’s plan to sell its assets to a new company that could emerge from bankruptcy protection.

Their opposition, with objections filed by consumer groups, a handful of states and cities, and individual retirees, shareholders and bondholders, threatens to put the brakes on what the company and the government had hoped would be a rapid trip through the Chapter 11 process.

The bondholders’ group, Unofficial Committee of Family and Dissident G.M. Bondholders, said it was being treated unfairly compared with the automaker’s other stakeholders and deserved more than the 10 percent stake in the new company that it would receive if the sale went through.

In its motion, the bondholders group accused G.M. and the federal government of unjustly hurrying the case through bankruptcy at the expense of the bondholders and dividing the new company’s assets “among a few select favored classes.”

“G.M.’s bondholders appear to be the most disfavored and discriminated class in the scheme,” the group wrote, pointing to the 17.5 percent stake that the United Automobile Workers union is slated to get under the sale.

The group says it represents about 1,500 bondholders with holdings worth more than $400 million. It is also asking the court to permit it to create a formal committee that could negotiate with G.M. separately from the larger bank and investment firm bondholders. A hearing on that request is scheduled for Tuesday.

A G.M. spokeswoman, Renee Rashid-Merem, declined to comment on the group’s objection, saying that the company did not discuss specific claims or possible outcomes that would be determined by the bankruptcy court.

As part of G.M.’s restructuring plan, the automaker wants to sell the bulk of its assets to a new company in which the federal government would take a 60 percent stake. The Canadian government would get 12.5 percent, the U.A.W. 17.5 percent and unsecured bondholders 10 percent. Existing G.M. shareholders are expected to be wiped out.

http://www.nytimes.com/2009/06/20/business/20auto.html?_r=1

I OBJECT...NO YOU ARE OUT OF ORDER