The U.S. Treasury and Canada’s export credit agency have no right to recover proceeds from a $1.5 billion lawsuit brought by creditors of General Motors on behalf of the now-restructured auto company’s bankruptcy estate as repayment of loans they made to help GM out of bankruptcy, a Manhattan judge has ruled.
Southern District Bankruptcy Judge Robert E. Gerber has found in Official Committee of Motors Liquidation Co. v. U.S. Dept. of the Treasury, 11-09406, that the Treasury and Export Development Canada (EDC), a corporation owned by the Canadian government that provides financing to Canadian exporters, specifically gave up their right to the proceeds of the creditors’ lawsuit. That lawsuit seeks a judgment that a $1.5 billion term loan made to GM before its bankruptcy by a group of banks was not secured, and is still unresolved.
