Motors Liquidation disclosure statement approved; plan confirmation hearing set for March 3

By Jennifer Lanning Drey

Savannah, Ga., Dec. 8 - Motors Liquidation Co., formerly General Motors Corp. received court approval of the disclosure statement for its plan of liquidation, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The plan confirmation hearing is scheduled for March 3.

As previously reported, upon confirmation of the plan, substantially all of the company's assets and liabilities will be transferred to four trusts, including the Environmental Remediation Trust, which provides funds for the continuing environmental remediation of Motors Liquidation's remaining properties and the General Unsecured Creditors Trust, which will be responsible for resolving the outstanding unsecured claims and distributing General Motors Co. common stock and warrants owned by Motors Liquidation to those unsecured creditors.

A third trust will handle both present and future asbestos-related claims, while a fourth trust will deal with litigation-related claims.

Creditor treatment

According to the disclosure statement, treatment of creditors will include:

• Holders of administrative expense claims, priority tax claims, debtor-in-possession credit agreement claims and priority non-tax claims will be paid in full in cash;

• Holders of secured claims will either be paid in full in cash, receive the proceeds from the sale of the collateral securing the claim, receive the collateral or have their claims remain unaltered;

• Holders of general unsecured claims will receive from the general unsecured trust a share of new GM securities and general unsecured trust units.

Also, to the extent these creditors are entitled to proceeds from a term loan avoidance action and asbestos insurance assets, they will receive a share of those proceeds;

• Holders of property environmental claims will be treated in accordance with environmental trust and consent decree and settlement agreements;

• Asbestos personal injury claims will be channeled to an asbestos trust and be treated in accordance with trust distribution procedures; and

• Holders of equity interests will receive no distribution.

GM, a Detroit-based automaker, filed for bankruptcy on June 1, 2009. The new General Motors Corp. emerged from Chapter 11 on July 10, 2009, and Motors Liquidation's Chapter 11 case number is 09-50026.

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