Judge Robert Gerber approved the financing after GM’s lead bankruptcy attorney said the company revised the figure to settle creditors’ and local governments’ concerns. The approval of financing means GM is one step closer to exiting bankruptcy as a government-owned company.
The $33.3 billion of approved financing will come from the Canadian and U.S. governments. Roughly $30.1 billion will come from the U.S. government (on top of the $19.4 billion already given), giving the U.S. Treasury ownership of 60.8 percent of the new GM.
Judge Gerber accepted the inclusion of a clause authored by the U.S. Treasury that allows the government to pay for GM’s bankruptcy using funds issued in the $700 billion financial industry bailout. This issue had raised concerns during Chrysler’s bankruptcy proceedings.
GM also defended the fees paid to its two bankruptcy advisers, Evercore Partners and Alix Partners. U.S. officials objected to GM’s proposed payments to Evercore and Alix, saying they were “inordinately large.” The firms sought $40 million for the 30 days of work. This is in addition to the $85 million that GM paid to both companies before bankruptcy.
GM defended both firms, saying Evercore addressed financial talks with the government and creditors, while Alix helped oversee normal day-to-day operations.
Source: Detroit Free Press