General Motors Co. is worried that a little-noticed lawsuit could reopen the books on its massive 2009 federal bailout, the Wall Street Journal reported yesterday. The lawsuit, filed by a trust representing "old" GM's unsecured creditors, attacks a "lockup agreement" that sent hundreds of millions of dollars to a group of hedge funds to get them to drop their claims against GM's Nova Scotia unit. The deal helped keep the unit's parent, GM Canada, out of bankruptcy, but the unsecured creditors trust says that it was unfair, and, more importantly, not disclosed properly to a bankruptcy judge. Subscription required: http://blogs.wsj.com/deals/2012/09/27/creditor-lawsuit-could-undo-eleme…
In related news, General Motors Co. Chief Financial Officer Daniel Ammann, who advised the automaker on the eve of its 2009 bankruptcy while working as a Morgan Stanley banker, testified that he did not know at the time that the bank sat on the other side of a deal he was negotiating, Bloomberg News reported yesterday. Ammann, Morgan Stanley's former head of industrials investment banking, testified yesterday in a trial over how the bankruptcy treats general creditors and hedge funds that negotiated a $3 billion claim for holders of some Canadian notes. The lawsuit could harm new GM by as much as $918 million, Ammann testified.
http://www.businessweek.com/news/2012-09-27/general-motors-cfo-says-una…