Bloomberg News

GM Creditors to Mediate Dispute With Elliott, Fortress (1)

June 27, 2013

Creditors of General Motors Co. (GM:US)’s old assets in bankruptcy will start settlement talks with funds including Elliott International LP, Fortress Investment Group LLC (FIG:US), Morgan Stanley (MS:US) & Co. International and units of Paulson & Co. over $3 billion in disputed claims.

The court-ordered mediation will be overseen by Judge James Peck, according to court papers filed today in U.S. Bankruptcy Court in Manhattan. The dispute (GM:US) stems from a settlement made by the hedge funds regarding their investment in a Canadian unit of GM on the day of the automaker’s 2009 bankruptcy.

The mediation has been agreed to “for the purpose of facilitating a settlement,” creditors said in court papers.

A trust sued the hedge funds on behalf of creditors as part of the bankruptcy, questioning their right to a $367 million cash fee and a claim of $2.67 billion. GM Chief Financial Officer Daniel Ammann testified in court hearings that a negative outcome in the dispute could cost the automaker, now out of bankruptcy, as much as $918 million (GM:US), or 50 cents a share.

The main bankruptcy case is In re Motors Liquidation Co., 09-bk-50026, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The adversary case is Motors Liquidation Company GUC Trust v. Appaloosa Investment Limited Partnership I, 12-bk-09802, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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Companies Mentioned

  • GM
    (General Motors Co)
    • $37.75 USD
    • -0.22
    • -0.58%
  • FIG
    (Fortress Investment Group LLC)
    • $7.25 USD
    • 0.02
    • 0.28%
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