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The group of dissenting General Motors bondholders that submitted paperwork last Friday asking the bankruptcy court to veto the automaker’s plan to sell its best assets to a new company has been denied “official committee” status.
Bankruptcy Judge Robert Gerber said the group, which calls itself the “Unofficial Committee of Family & Dissident GM Bondholders,” would be able to raise objections during the bankruptcy process but its arguments didn’t merit the status ofan official committee. Judge Gerber said the 15-member official unsecured creditors’ committee adequately represents the bondholders.
If the committee had attained official status, GM would have been forced to pay the committee’s fees, rather than the committee paying for the expense itself. For this reason, the group’s lawyer insisted it was important that the group achieved official status because its members were retirees and individual families that could not afford the fees.
“Some people think we are insane to be standing in the way of this process, but this is about adequate representation,” said Michael Richman, an attorney representing the group. Richman said the group was likely to continue to object to GM’s plan, but wasn’t sure whatit would be able to do withits spending limits.
Source: Automotive News
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