Sat, May. 30, 2009

Opel Bankruptcy Precedes GM Bankruptcy

CK - Washington.   While IP holders scramble to gather their contracts and open invoices for review by attorneys in light of the imminent GM bankruptcy and for the preservation of their potentially preferred handling in the bankruptcy case under 11 USC §365, while bondholders have until 5 p.m. this afternoon to make up their minds on the offer to lose some or all of their paper, and while union members settle into the reality of the new trust arrangement to preserve health insurance and pension rights, developments in Germany set into more relaxed state after feverish negotiations at the highest levels of corporations and the state and federal governments.

Under an widely published arrangement reached last night, GM subsidiary Opel GmbH will benefit from rescue funds provided in large part by the German federal government and Russian financiers. The arrangement gives majority control to Magna, the Canadian auto-parts maker, of Opel GmbH which also includes British make Vauxhall. To prevent a GM bankruptcy from nixing the deal and sucking German taxpayer funds into the anticipated GM bankruptcy, Opel GmbH will file for bankruptcy, Insolvenz, on Saturday -- two days before the expected GM filing.

Addendum: More recent reports note that the parties tentatively agreed on a trust agreement to avoid an Opel bankruptcy filing.


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