Courtesy of the $83 billion auto bailout – on which we are already poised to lose more than $40 billion – the taxpayers are stuck with 26% stock ownership of General Motors (GM). It could get much worse.
Judge Set to Rule on Case That Could Reverse Auto Bailout
A New York federal judge may rule imminently on a case that could reverse the General Motors bailout and send the company back into bankruptcy….
At issue is a backroom deal hatched by GM to fulfill the Obama administration’s demand for a quick bankruptcy, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009….
On the eve of entering bankruptcy, the company cut a $367 million “lock-up agreement” with several major hedge funds to prevent GM Canada from failing. The agreement ensured that GM could spin-off its liabilities to “old GM,” while using a multi-billion dollar bailout to create a new company….
“(Judge Robert Gerber) has made it very clear that he is greatly dissatisfied with the process,” one analyst told the Washington Free Beacon in October. “He’s basically implying that GM hid it from him and that reopening the sale is a possibility.”…