Q: What can holders of bonds that are identified on Wilmington Trust Company's notices expect with respect to payouts? Common stock in New GM, warrants, cash?
A: Persons holding bonds, notes, and debentures that are identified by the CUSIP numbers reflected on the front page of the Wilmington Trust Company notices are unsecured creditors of the estate of Motors Liquidation Company. Following the payment of priority claimants (if not satisfied though the "wind-down" budget provided by the U.S. Treasury), all unsecured creditors, including the bondholders, will ultimately receive a pro-rata share of the remaining assets of Motors Liquidation Company. Following the sale of substantially all of its assets to New General Motors in July 2009, the primary assets held by Motors Liquidation Company consist of (i) 10% of the common stock of New General Motors, and (ii) warrants to purchase up to 15% of common stock of New General Motors on a fully diluted basis. Through the liquidation process of Motors Liquidation Company, bondholders (together with all other unsecured creditors) will ultimately receive shares of the common stock and warrants held by Motors Liquidation Company.
Q: What is the dollar value of claims against the estate of Motors Liquidation Company? If the claims pool exceeds $35 billion, will additional stock be issued?
A: The number and amount of claims against the Debtors is currently unknown. November 30, 2009 was the bar date by which all proofs of claim against the Debtors were required to be filed. In the months following the passage of the bar date, the Debtors have begun the initial phases of resolving claims in order to determine the size of the creditor claim pool. Certain filed claims are likely to be disallowed. In the event that the total allowed general unsecured claims against the Debtors exceeds $35 billion, New General Motors has agreed to issue an additional 10,000,000 shares of common stock to Motors Liquidation Company (for ultimate distribution to its creditors).
Q: When can I expect a distribution from the bankruptcy estate?
A: On August 31, 2010, Motors Liquidation Company filed a plan of liquidation and disclosure statement with the Bankruptcy Court. Copies of the plan and disclosure statement are available on the section of this website entitled "Plan and Disclosure Statement." The plan and disclosure statement have not been approved by the Bankruptcy Court, and such approval is a prerequisite to the making of distributions from the bankruptcy estate. On October 21, 2010, the Bankruptcy Court conditionally approved the disclosure statement pending certain revisions and additional disclosures. To date, however, Motors Liquidation Company has not filed a revised version of the disclosure statement and final Bankruptcy Court approval is still pending. In addition, while Motors Liquidation Company initially indicated that it intended to seek approval of the plan prior to the end of calendar year 2010, no hearing with respect to confirmation of the plan has yet been scheduled. Wilmington Trust Company will provide further information on timing when such information becomes available.
Q: How does the New GM IPO impact the New GM stock held by Motors Liquidation Company?
A: Motors Liquidation Company holds 50 million shares of New GM common stock (approximately 10% of New GM common stock outstanding) and warrants to acquire approximately 91 million additional shares of New GM common stock (approximately 15% of New GM common stock on a fully diluted basis). In addition, if the total amount of allowed general unsecured claims against the Debtors exceeds $35 billion, Motors Liquidation Company may receive up to an additional 10 million shares of New GM common stock. The Debtors have previously indicated that such stock and warrants will be available for distribution to the Debtors' general unsecured creditors pursuant to a plan of liquidation. Motors Liquidation Company had the right to offer some or all of its New GM common stock and/or warrants in the IPO and consulted with the Official Committee of Unsecured Creditors (a representative body for all unsecured creditors on which Wilmington Trust sits) on whether or not to participate. Based upon the then available facts and circumstances, and upon a review of the detailed analysis of its professionals, the Official Committee of Unsecured Creditors determined that it was in the best interests of unsecured creditors to decline participation in the IPO. Among other reasons, the Official Committee of Unsecured Creditors determined that it was in the interests of individual creditors to retain the option to receive New GM securities (and the potential upside from any commensurate capital appreciation) or to liquidate the securities upon receipt for cash. Even though Motors Liquidation Company will not participate in the IPO, it is anticipated that the New GM common stock and warrants distributed to the Debtors' general unsecured creditors pursuant to a plan of liquidation will be freely tradable without registration under the securities laws or inclusion in the IPO.
