Old GM Carved into 4 Trusts for Claims

The company known as “Old GM” exited Chapter 11 bankruptcy last week and was carved into four trusts, marking the close of one of the most complex Chapter 11 cases in U.S. history.

GM filed for bankruptcy in June 2009 and its best assets were sold to a new, stand-alone company the following month in a deal that was funded with $50 billion from the U.S. government.

The rest of its assets were put into another entity called Motors Liquidation Co. (MLC). Earlier this month, a federal judge said he would approve a bankruptcy plan for the company.

The plan creates four trusts, one of which will be responsible for resolving claims of the debtors’ unsecured creditors and allows for the distribution of General Motors stock and warrants to creditors.

MLC owns 10 percent of GM’s common stock in addition to warrants.

A second trust will handle environmental response for Old GM’s remaining properties. A third trust will handle present and future asbestos-related claims. The last trust will deal with litigation claims.

(Reporting by Deepa Seetharaman; Editing by Richard Chang)