Creditors General Motors Co. 's predecessor in bankruptcy, which will probably receive about $ 5 billion of 20 billion U.S. dollars the automaker's new IPO, might be able to buy more million new shares at least third of the price yesterday.
mass of GM bankruptcy was issued 150 million shares, or 10 percent of the shares in the new company, to help pay creditors. At yesterday's closing price of $ 34.19, the stock is worth $ 5,100,000,000.
GM has called old entitlement orders to buy about 273 million shares at between $ 10 and about $ 18 each, according to the company in November 1917 filing with the Securities and Exchange Commission. If the increase of actions such as CRT Capital Group LLC Kirk Ludtke expected, creditors a chance to win even more.
"We appreciate the actions of the new GM at $ 45," said Ludtke, senior vice president at Stamford, brokerage firm based in Connecticut.
The bankruptcy estate is the settlement of its liabilities, which were 35.7 billion U.S. dollars as of September 30, according to its latest monthly operating report. If the unsecured claims are certified as more than $ 35 billion, inheritance could get at least 10 million new shares of GM. Old GM declared bankruptcy in June 2009.
"But bankruptcy would have a high probability that he knew that GM would have been dismantled, dismembered, and would not have this American icon is still there," said Harvey Miller, an attorney with New York-based Weil Gotshal & Manges LLP who represented GM in its bankruptcy.
GM rose to $ 35.99 before closing at 3.6 percent above the initial offering price on the NYSE stock exchange yesterday.
Bonds Fall
8375 Old GM percent bonds, due July 2033 fell 2.563 cents to 32.5 cents on the dollar yesterday in New York, according to Trace, the Financial Service Industry Regulatory Authority bond pricing.
"The big question being debated is a long time if the value of being raised in the IPO is really the value that should have been part of the mass of creditors of age," said Michael P. Richman, director of the practice of the restructuring of Patton Boggs LLP, who represented the bondholders difficult the government's plan for GM in June 2009.
The big winners are the government, which has a stake in the automaker revived in exchange for the $ 50 billion bailout, and other stakeholders in the new general manager, said in a telephone interview.
If the claims against the old GM go as high as $ 42 billion, creditors could get up to 30 million new shares, according to IPO documents.
Cadillac, Chevrolet
When the old GM went bankrupt, sold their best assets, including Cadillac and Chevrolet divisions, a new company. undesirable properties, such as outdated plants and its Saturn division, came under the protection of bankruptcy court and was settled under a borrowing plan that pays the U.S. Treasury and Canada.
A special committee of bondholders of GM to be held about 54 percent of the automaker's $ 27 billion in bond debt in support of a plan to swap debt for equity. A committee was called the "Unofficial Committee of Bondholders GM Family and dissidents, including three holders of $ 2.3 million bond, had opposed the sale of GM its good assets to an entity Treasury funds. They were denied the court's permission to form a committee in the bankruptcy case.
"It's great that all this money being raised, people are very bad I had 27 billion U.S. dollars of bonds, many of which were removed from GM, could not participate," said Thomas Lauria, a lawyer and White Case LLP representing dissenting creditors in the bankruptcy of Chrysler.
Shot in the arm
While revenues IPO is a shot in the arm to the creditors of the old GM, which was renamed Liquidation Motors Co., the amount of environmental and other claims not yet recognized may dilute the final recovery.
A draft plan to distribute the assets of the bankruptcy estate was provisionally approved by U.S. Bankruptcy Judge Robert Gerber in New York on 21 October.
A proposed resolution of environmental GM to set aside 773 million U.S. dollars to settle claims by the federal government and 14 states. A combination of cash and assets, put in trust, would cover the cleanup of 89 properties with more than half the money going to New York and Michigan.
U.S. do not give a total estimate of what GM must be claimed by cleanup costs, and the Environmental Protection Agency makes claims on the basis of potential liabilities that are often shared between several "potentially responsible." Two units of the defunct automaker formed to keep the environmental liabilities should be about $ 1.2 billion in cleanup costs, according to court documents.
Asbestos Liability
GM estimates that property has $ 648 million in asbestos liability. A creditors' committee, said in court papers that the amount may be five to ten times that amount. Creditors seek court permission to investigate the General Motors and other companies not in bankruptcy in order to estimate the potential demand for asbestos.
The case is In re Liquidation Motors Co., 09-50026, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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