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  • dfwmcse dfwmcse Jun 18, 2012 1:22 PM Flag

    Bankruptcy Court Claims Total

    WSMWHO, CrazyDaisy, et al:

    Do we know what the total allowed claims to the court will be, or do we at least have an estimate on the cap? I'm mostly interested in knowing if we will exceed the $35B threshold.

    From the most recent 10-K (June 12, 2012):
    "In the event that the Bankruptcy Court enters an order that includes a finding that the estimated aggregate Allowed General Unsecured Claims
    against the Debtors exceed $35 billion, New GM will be required, pursuant to the MSPA, to issue additional shares of New GM Common Stock, or
    Additional Shares, for the benefit of the GUC Trust’s beneficiaries. The number of Additional Shares to be issued will be equal to the number of
    such shares, rounded up to the next whole share, calculated by multiplying (i) 30 million shares (adjusted to take into account any stock dividend,
    stock split, combination of shares, recapitalization, merger, consolidation, reorganization or similar transaction with respect to such New GM
    Common Stock from and after the closing of the 363 Transaction and before issuance of the Additional Shares) and (ii) a fraction, (A) the numerator
    of which is the amount by which Allowed General Unsecured Claims exceed $35 billion (such excess amount being capped at $7 billion) and (B) the
    denominator of which is $7 billion. No Additional Shares have been issued as of the date hereof."

    I find this a bit disturbing because the language used does not match what the original sales agreement stated: If claims exceeded $35B, they were going to issue another 2 percent of GM common stock to pay the debtors. I do not remember this formula appearing in the 363 sales agreement.

    Any information you have would be greatly appreciated.

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