Justice could finally prevail for the investors victimized by the shady GM bailout deals made in 2009.  Judge Robert Gerber, the same judge who approved the sale three years ago, is preparing to rule on the lawsuit brought by the old GM trustees.

The judge is ruling on new information that at the 11th hour, in the dark of night, GM cut a slick deal with major hedge funds, effectively draining the company of its cash assets, leaving the investors with a corporate shell of liabilities.  A new company was then created with the $367 million stolen from the investors and Obama gave the financially decimated GM $100 billion of taxpayer money.

Of course, this information was purposely withheld from the bankruptcy court.  And Judge Gerber is not happy he was deceived.

From the Washington Free Beacon,

A New York federal judge may rule imminently on a case that could reverse the General Motors (GM) bailout and send the company back into bankruptcy, according to sources close to the case.

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.

One condition of GM’s bailout was to shore up its overseas subsidiaries. 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.

All of that could be reversed if bankruptcy Judge Robert Gerber reopens the process and rules in favor of old GM trustees, who are suing the hedge funds at the center of the lockout agreement.

“In this particular situation, there’s $1.3 billion in liabilities, but that’s just what’s officially back on the table if the court rules for old GM,” said a bankruptcy expert close to the negotiations. “If those go back on the table then everything could be back on the table and [new GM] would have to address them.”

Those liabilities, which include old GM’s debt and product liabilities that pre-date bankruptcy, are valued at $30 billion, a sum that would wipe out the company’s $34.6 billion cash reserves.

Negotiators representing both sides of the case met in New York on Thursday to try to settle the suit through mediation rather than a court order.

“They’re feeling pretty good about it,” said an industry insider who spoke to one of the hedge fund negotiators on Thursday.

Gerber, the federal judge who initially approved the sale with little hesitation, now has the power to reverse the entire auto bailout. He has expressed deep frustration with the company for failing to disclose the deal, leading some to speculate that he may overturn one of President Barack Obama’s signature achievements. …

“The judge 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.”

If Gerber takes that course the company could be forced to return the $30 billion taxpayer bailout that it received through the course of bankruptcy, on top of the new liabilities. …

“Officials from the U.S. and Canada were very much involved—they were in the building when the deal was being negotiated,” an insider familiar with the deal said in October.

The Treasury Department, which oversaw the auto bailout, did not return emails for comment.

The company is taking the possibility of a negative ruling from Gerber very seriously. GM attorneys filed court documents saying that the lawsuit “could create a chaotic situation for GM Canada, spawn new litigation in other forums, and potentially provide a windfall to the noteholders.”

The bankruptcy expert said if the two sides cannot come to an agreement on Thursday, Gerber could preside over one of the most historic rulings in bankruptcy court history.

“This has tremendous implications for future of American business and bankruptcy precedent,” he said. “It means more than just GM—this is the rule of law and how creditors are treated in the United States legal system.”

No wonder Hugo Chavez endorsed Obama…he sees his kindred spirit.  What a pile of lies, deceit, and immoral behavior coming from the Obama presidency.  The judge should reverse the whole thing and remind the Liberal thugs that we are not Venezuela.

Hat tip: Gini

 

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  1. Wanna bet how this turns out?

  2. Once again another story main stream media is ignoring…

  3. And Barry campaigned on GM’s success ad nauseum. Gag!

  4. MSM missing in action again. Wonder if this would have any effect on the Delta workers who got screwed in the original deal?

  5. The Treasury Department, which oversaw the auto bailout, did not return emails for comment.

    Geithner.

    Eric Holder has not been forthcoming about Fast and Furious campaign

    See any similarity here?

  6. OT

    Rotting whale casts foul stench into Malibu

    Read more here: http://www.miamiherald.com/2012/12/06/3129884/rotting-whale-is-gigantic-problem.html#storylink=cpy

    BLOWING IN THE WIND: ROTTING WHALE CASTS FOUL STENCH OVER CELEBS’ HOMES IN MALIBU…

    Obama will hope right on this, because the rich donors must be complaining and we can’t have that.

  7. Patty, the stench is actually being caused by the rotting souls of the celebs that voted for Obama. The whale would be just a convenient excuse.

  8. Who appointed this judge?

    Liberal judges don’t seem to care what the law or the constitution says. They exist only to protect, and sometimes enact, liberal precedents.

    Imagine if the NFL played by a ‘Living Rule Book’. Long standing rules that players have trained themselves to work around would be changed in mid-play. The referee would single out the more skilled players for penalties, ASSUMING that their performance is the result of cheating……..the result of violating a rule that does not yet exist.

    And of course the only way to ensure ‘equality’ is if both teams scored exactly the same number of goals. For equality’s sake, every game must end in a tie.

  9. The legitimate bond holders got screwed, the union goons walked away with pockets full of quid pro quo money.

  10. of course obama and his admin will say they didn’t know anything about this.

  11. With Michigan possibly becoming a right to work state and now this, perhaps there is hope for our Republic.

    tag

  12. Gee, let’s see how this will turn out. Judge Gerber is a wuss, this is all a roadshow to cover his own ass by at least “looking into” the matter, and will cave after he gets “a call,” just like Chief Justice Roberts folded on Obamacare after he got “a call.”

  13. I wish they would have bailed out Hostess instead of GM, with the economy like this at least I could have afforded a box of Twinkies or HoHOs and been able to enjoy life for a few sweet minutes.
    GM took my hard earned money and did absolutely nothing for it, this Holiday season here’s hoping GM and our President Fail in all their endeavors. I will always refer my friends to buy a Ford…And here’s hoping moochie chokes on all of the Hostess products she has hoarded in the WH basement….

  14. But, …but… I was assured by Obama himself that Al Queida was dead, and GM was still alive.

  15. [CNSNews.com) - Seventy-three percent of the new civilian jobs created in the United States over the last five months are in government..] gm alive is only part of the story with the remainder…….on life support.
    http://cnsnews.com/news/article/73-new-jobs-created-last-5-months-are-government

  16. OT — Petition BHO to Cancel Hawaii Vacation – at 25K signatures, it’ll require a response from POTUS

    A new petition gaining ground on the White House website calls on President Obama to cancel his estimated $4 million vacation and devote the money instead to helping victims of Hurricane Sandy.
    [...]
    The $4 million price tag for Obama’s vacation was calculated by the Hawaii Reporter and includes $250,000 in local costs.

    But the actual expense to the federal government alone is likely even higher than $4 million, since the cost of just the transportation – roundtrip flights for Air Force One and an accompanying cargo plane – amounts to about $3,530,000, according to the Reporter.

    http://www.whitehousedossier.com/2012/12/07/wh-petition-demands-obama-cancel-hawaii-vacation/

  17. This country isn’t GOING to go over the fiscal cliff in January. It went over the fiscal cliff in 2008.

    What’s going to happen in January is that we are going to hit the ground.

  18. No politician (or MSM) is will to say what they mean and will never mean what they say.

    The ObaMOOO (Obams the Marxist Oval Office Occupier) and his sycophantic puppets in the MSM will stonewall any discussion on this subject.



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