Former GM gets exclusivity extension, OK for charter amendment vote

By Caroline Salls

Pittsburgh, Sept. 24 - Motors Liquidation Co., formerly General Motors Corp., received an extension to its exclusive period in which it may solicit votes on its plan of reorganization, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company's exclusive solicitation period was extended to March 29, 2011 from Nov. 29.

"Because of the vast number of parties in interest in these cases and the substantial number of creditors involved in the plan solicitation process, it is not practical to complete that process prior to the current expiration of the solicitation period," the motion said.

In addition, the company received court approval to exercise its stock powers to vote in favor of an amendment to the charter of the new General Motors Co.

Under the charter amendment, new GM sought permission to preclude some transfers of corporation securities in order to protect against an ownership change after its initial public offering.

Motors Liquidation said the amendment would not affect the distributions of securities in new GM to creditors under its Chapter 11 plan.

According to the filing, new GM solicited support for the amendment in an attempt to preserve valuable tax benefits.

More specifically, the company said the charter amendment reduces the risk of an ownership change in the new GM that would limit its ability to use net operating losses and other tax attributes.

The tax benefits totaled $42 billion at Dec. 31, 2009.

Motors Liquidation is a significant stockholder in new GM as a result of the sale of substantially all of its assets to new GM.

GM, a Detroit-based automaker, filed for bankruptcy on June 1, 2009 in the U.S. Bankruptcy Court for the Southern District of New York. 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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