Lehman ABS CorTS 2001-08 7.375% General Motors (CCYPQ)

[marayatano]

GM plans comeback a month early

By Bernard Simon in Toronto

Published: June 18 2009 22:27 | Last updated: June 18 2009 22:27

General Motors is preparing to relaunch itself as a leaner company by mid-July, a month earlier than envisaged when the Detroit carmaker filed for bankruptcy protection on June 1.

The judge overseeing GM’s Chapter 11 case has set Friday as the deadline for objections to its restructuring plan.

Barring a last-minute surprise, GM and its advisers are confident that none of the roughly 500 objections submitted so far will derail the timetable, under which the court is due to consider the sale of most of the carmaker’s assets to a new entity on June 30.

“It really is remarkably quiet,” one person familiar with the process said. According to another, the company is drawing up plans to reveal its new board of directors and possibly a raft of senior management changes around the middle of July.

Most of the objections raised so far relate to suppliers’ concerns about the amount and timing of payments by the “new” GM under contracts taken on by the existing company. Assets of the “old” GM will remain in Chapter 11 to be sold or wound down for the benefit of creditors.

Possible stumbling blocks include a potential backlash from unsecured creditors as well as dissidents among holders of $27bn in unsecured bonds. A small group of dissident bondholders, holding less than 1 per cent of the securities, has asked the court to allow them to form a committee which would give them a formal voice in the proceedings.

The official committee of unsecured creditors met Fritz Henderson, GM’s chief executive, last week. Tom Mayer, the committee’s legal adviser, declined to comment on its plans.

At the time GM filed for court protection, holders of about 54 per cent of the bonds had approved its offer of a 10 per cent equity stake and warrants for another 15 per cent. GM is restructuring under a seldom used provision of the US bankruptcy code: a normal process would require approval of two-thirds of the securities. The US government is set to emerge as GM’s biggest shareholder, with a 60 per cent stake.

Eric Ivester, a restructuring specialist at law firm Skadden Arps, said: “It’s certainly unique when the government is both the acquirer and the provider of debtor-in-possession financing. [The GM case] is on a rapid track. Prospects for approval appear good.”

GM has taken steps to assuage the two groups – secured creditors and dealers – that worked hardest to derail Chrysler’s recent 41-day journey through bankruptcy court. GM has pledged to repay secured claims in full.

Although GM has told 1,100 of its 6,000 dealers that their sales and service franchises will not be renewed, it has taken a more conciliatory stance than Chrysler.

Robert Gerber, the judge hearing GM’s case, has a debtor-friendly reputation. If all goes to plan, the hearing will take a few days.

Copyright The Financial Times Limited 2009

http://www.ft.com/cms/s/0/55c48d2e-5c34-11de-aea3-00144feabdc0.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058&nclick_check=1

There may be a possibility that bondholders may want more than 10% (including their 15% warrants). It would be icing on the cake.



SIDE NOTE/SUGGESTION: Name of Board is: Lehman ABS 7.375% CorTS GM

If you want to change it to: Lehman ABS 7.375% CorTS GM General Motors

So when someone does a search for General Motors, it will show up. I have tried GM, it goes to General Motors Board. Tried Lehman, it comes up along with the other Lehmans. General motors, nothing showed up.