GM Lawyer Says Auto Panel to Be Gone by September
By Matthew Lucas-Miller and Craig Trudell
July 14 (Bloomberg) — Harvey Miller, the lawyer who represented General Motors Co. in its bankruptcy restructuring, said he expects the Obama administration’s auto task force to dissolve in the next six weeks.
“I really believe that by the end of August, the task force will be gone,” Miller, of Weil Gotshal & Manges LLP in New York, said today in a Bloomberg Television interview.
Steven Rattner stepped down yesterday as head of the U.S. panel that forced GM and Chrysler Group LLC’s predecessor into bankruptcy after the companies accepted more than $75 billion in taxpayer funds. His departure leaves Ron Bloom, a former union adviser and Lazard Ltd. vice president, to oversee carmaker decisions, including when to sell stakes in the two companies.
The task force’s mission “was to set up GM and Chrysler as reorganized or restructured entities,” said Miller, 76. “That’s been completed.”
GM, based in Detroit, emerged from bankruptcy July 10, after 39 days, by selling most of its assets to a U.S. Treasury- funded buyer. Chrysler Group was formed with the sale of most of its predecessor’s assets on June 10 to a group led by Italy’s Fiat SpA.
GM left bankruptcy with four brands — Chevrolet, Cadillac, Buick and GMC — and plans to shed its four others by sale or liquidation. Chrysler spun its Chrysler, Jeep and Dodge brands off through bankruptcy with less debt and lower wage costs.
“The winding down of Old GM and Old Chrysler will take a significant period of time, but it will not involve anything like the task force,” Miller said. “It will be an ordinary liquidating bankruptcy.”
Protests about the handling of the automakers’ bankruptcies won’t deter lenders from working with GM and Chrysler Group, Miller said.
“I’ve been around a long time in this business and I’ve heard financial institutions say, ‘We will never lend another penny to this industry’ on the basis of this decision in bankruptcy court or elsewhere,” he said. “Three or four months later, they’ve totally forgotten. There is no institutional memory in this world.”
The sale of Chrysler assets was “unorthodox,” Miller said. Some secured creditors of the automakers argued that their rights were violated.
“There’s a lot of to-do about invading secured creditor rights and the government trampling on such rights,” Miller said. “I think in the final analysis, that’s not true.”