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2 senators float plan for a GM share trust

June 18, 2009

2 senators float plan for a GM share trust


WASHINGTON — Two U.S. senators — one Democrat, the other a Republican known well in Michigan’s auto industry circles — introduced a measure Wednesday that would put the government’s shares of General Motors in a new trust and call for those shares to be liquidated by the end of 2011.

Sen. Bob Corker, a Tennessee Republican who played a key role in unsuccessful negotiations over congressional funding for GM, Chrysler and Ford last December, introduced the legislation with former Virginia Gov. Mark Warner, a Democrat.

The legislation would apply to any private companies in which government has taken a stake of 20% or more through the Troubled Asset Relief Program. By the time GM comes through bankruptcy restructuring, that would include the automaker, insurance giant AIG and financial institution Citigroup.

In a statement, Corker said TARP "has taken American taxpayers into uncharted territory as common equity owners of private companies" and a "responsible exit strategy from government ownership" is needed.

A limited liability corporation would be created to take ownership of the government’s assets, overseen by three independent trustees appointed by the Obama administration. The White House had no comment.

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