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Wednesday, 05/25/2011 9:45:03 AM

Wednesday, May 25, 2011 9:45:03 AM

Post# of 7196
May 25. 2011 1:00AM, 'Old GM' exit bid opens with GM stock sale
Offer is part of plan to liquidate, settle claims by year's end
Christina Rogers/ The Detroit News

The estate of the "old" General Motors Corp. began selling stock and warrants in the new GM on Tuesday, as part of a plan to liquidate the company's remnants by the year's end.

Motors Liquidation Co., the leftovers from old GM, said in a regulatory filing that it will sell $5.7 million worth of common stock and warrants, or about 245 million shares. That includes 87,000 shares of common stock, valued at $2.7 million, and another 158,000 in warrants to buy "new" GM stock at pre-set purchase prices.

Half of the warrants will allow investors to buy the stock at $10 a share; the rest will lock in a price of $18.33 per share, according to a U.S. Securities and Exchange Commission filing.

During the automaker's 2009 bankruptcy, the new GM splintered off from Motors Liquidation, which holds old GM's debts and bad assets. All "good" assets owned by the old GM were sold to the new GM as part of the government's $49.5 billion bailout.

The U.S. Treasury has since reduced its 61 percent majority stake in the new GM to about one-fourth and has recovered $23 billion from the bailout.

A federal bankruptcy judge approved the old GM's liquidation plan in March, clearing the way for bondholders and creditors who lost billions of dollars in the automaker's bankruptcy to receive some compensation.

The plan created four trusts to execute the wind-down plan and resolve outstanding claims. One trust provides $536 million to clean up polluted industrial sites; another resolves asbestos and litigation claims.

There's also a trust to distribute new GM stock to creditors and bondholders. About 75 percent of stocks and warrants due to creditors were issued last month. The remainder likely will be paid in the next several months.

Last month, old GM stock was canceled and made worthless. Old GM stockholders received no recovery from the estate.

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