GM Finally Gets a Settlement After Bankruptcy
Hedge funds such as Fortress Investment Group LLC (NYSE:FIG) that had invested in a bond of some of General Motors Corp.’s (NYSE:GM) old businesses had a settlement approved recently. The settlement will give some of them 1.8 times the return of old creditors, according to Bloomberg. It will also end the fight over behavior around the time of GM’s collapse.
GM’s Nova Scotia unit also won a $1.55 billion claim upon U.S. Bankruptcy Judge Robert Gerber’s approval Monday. He said that due to controversy he decided to review the settlment, despite it’s status as unopposed, but said that everthing checked out. “This settlement will conclude years of complex litigation and substantially benefit the estate by reducing the claims at issue by more than $1.129 billion” said lawyers for creditors in the court papers.
Fortress Investment Group LLC (NYSE:FIG) had bought up quite a few of General Motors Nova Scotia Finance Co.’s bonds — as had Elliott, Aurelius Capital Management LP, and Appaloosa Management LP — in expectation of the automobile company’s bankruptcy. The hedge funds had expected to be able to make claims on the same debt more than once, something a Morgan Stanly analyst compares the move to putting “two straws in one milkshake.”