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Posts Tagged ‘GM bankruptcy protection’

GM Preparing to Settle with Ignition Switch Victims

Those not accepting settlement face protracted legal battles.

by on Jun.12, 2014

As GM CEO Mary Barra prepares to testify before a congressional committee, the maker is readying to deal with the victims of faulty ignition switch.

General Motors is preparing to settle the claims of anyone injured in an accident linked to a defective ignitions switch prior to the company’s 2009 bankruptcy as GM’s chief executive prepares to appear before another Congressional committee in Washington D.C. next week.

The settlements will be handled by Kenneth Feinberg, the New York attorney GM retained to handle the process, according to GM. While GM CEO Mary Barra said earlier this week that GM will compensate victims of the faulty ignition switch, Feinberg said last week that he will not have a final determination on the size of the settlement fund until next week.

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While that was good news to some, others are still unhappy with the automaker, especially those currently involved in litigation. Sources suggest that if the plaintiffs resist the settlement offered by Feinberg, GM plans to use its 2009 bankruptcy, which ended any legal claims arising prior to under the “old” GM, to protect itself from the resulting lawsuits. (more…)

GM Asks Bankruptcy Court to Dismiss Non-Injury Lawsuits

Maker wants to end litigation solely for monetary damages.

by on Apr.22, 2014

GM asked Judge Robert Gerber to dismiss several lawsuits against the automaker related to the faulty ignition switch recall of 2.6 million vehicles.

General Motors asked a New York bankruptcy judge to dismiss the growing number of lawsuits asking for monetary compensation for simply owning any of the vehicles involved in the faulty ignition switch recall.

The automaker noted in its motion that it’s not asking the court to address litigation involving “an accident or incident causing personal injury, loss of life or property damage.” It simply wants the Judge Robert Gerber to dismiss lawsuits filed asking for money for driving the vehicles. According to GM, there are more than 50 lawsuits against the company.

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“As your honor may be aware, numerous lawsuits have been filed across the country against New GM,” according to documents. “New GM believes that the ignition switch actions assert claims against new GM that are ‘retained liabilities’ of Old GM and therefore violate your honor’s July 5, 2009 order.” (more…)

GM Share Price Needs to Nearly Triple for Taxpayers to Break Even

Maker’s stock on a rise – but too little, too late.

by on Jul.24, 2013

GM's stock price would have to nearly triple to $95.51 for taxpayers to break even on the loan bailout package.

The good news for shareholders is that General Motors shares are on a rise, gaining more than 25% in value so far this year – and reaching a $37.45 high during Wednesday trading before settling back a bit.

Good news, perhaps, but not good enough for U.S. taxpayers who received 61% of GM’s equity in exchange for a $50 billion bailout linked to the maker’s 2009 bankruptcy. While the increase is likely to benefit the U.S. Treasury as it continues selling down its stake in the Detroit maker, the latest report by a special federal watchdog cautions that GM shares would have to nearly triple – to $95.51 a share – for the government to break even.

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“There’s no question that Treasury, the taxpayers, are going to lose money on the GM investment,” Special Inspector General Christy Romero told the Associated Press.

(more…)

GM Board Writes Their Own Obit and Defense

New GM emerging from bankruptcy will have a new board.

by on Jun.01, 2009

Kent Kresa has been a General Motors board member since October of 2003.

Kent Kresa, GM board member since October of 2003, is experienced with losses. From 2005 to 2009, GM burned more than $40 billion in cash, net worth dropped more than $100 billion.

“The General Motors Board of Directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many. Today marks a new beginning for General Motors. A court-supervised process and transfer of assets will enable a New GM to emerge as a stronger, healthier, more focused and nimbler company with a determination not to just survive but to excel,” said Kent Kresa, the interim chairman, who replaced Rick Wagoner when  the Obama administration fired him last month.

“The Board concluded that the proposed transformation will maximize the value of the enterprise, and the return to the many stakeholders who have been involved with GM over the years,” Kresa said this morning.

Whether the board fulfilled its fiduciary responsibility will be part of the legal challenges to its members during bankruptcy hearings by objecting creditors and bondholders, hence the existence of this statement.

“We are appreciative of the support from the U.S. Treasury, the President’s Task Force on Autos, the UAW and its members, salaried employees and retirees, concurring bondholders, and very importantly, the American taxpayers. The Board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world. The Board stands behind the people of GM in embracing this unique opportunity to create value and a new company that will design, engineer, build and market the best cars and trucks in world,” said Kresa.

The President, on March 30th, announced that a majority of the directors of New General Motors would be new, so by implication, some existing directors will continue with New GM and some new ones will appear. They will be selected based on consultations between Kresa, his colleagues and the Auto Task Force.

Fritz Henderson’s future?

Senior administration officials were non-committal about GM CEO Fritz Henderson’s future, but said they expected his relationship with the board of directors to continue. Since CEOs serve at the pleasure of the board and a new board is coming, Henderson’s future is unclear. At Chrysler both the Chairman and the CEO are being replaced in the New Chrysler.   (more…)