Lawsuit Questions If New GM Is Still Liable For Old Debts

The new General Motors Co. could be undone by a lawsuit that pits general creditors against hedge funds including Appaloosa Management LP, Elliott Management Corp. and Fortress Investment Group LLC over $3 billion, the car company said in a lawsuit that goes to trial today.

A trust for creditors of the old, bankrupt part of the auto-maker now known as Motors Liquidation Co. sued the hedge funds in Manhattan bankruptcy court in March, alleging that while GM was preparing its bankruptcy filing on June 1, 2009, the funds, which held notes in a Canadian unit of GM, “saw an eleventh-hour opportunity for profit and pounced.”

 

wins555 - 8/8/2012 11:06:05 PM

+1 Boost

The whole bankrupt process is to avoid paying old debts. Thats why the new GM now is "in the black".