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Creditors of “Old GM” Drop Claim
A trust that represents unsecured creditors of "old General Motors" the assets GM cast off in bankruptcy have agreed to drop a lawsuit over a payment made by the company more than four years ago, Bloomberg News reports.
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A trust that represents unsecured creditors of "old General Motors" the assets GM cast off in bankruptcy have agreed to drop a lawsuit over a payment made by the company more than four years ago, Bloomberg News reports.
The payment for $367 million had been made to four hedge funds of GM's business unit in Nova Scotia to keep GM Canada out of bankruptcy. The funds accepted the payment in return for waiving $1.3 billion in claims.
That payment prompted the just-settled lawsuit, which claimed the payment should have been disbursed through GM's bankruptcy. Bloomberg notes that a court reversal of the payment would have made the "new" General Motors Co. liable for $1.3 billion in claims.
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