GM Says $367M Hedge Fund Deal Was Signed After Ch. 11

Law360, New York (March 1, 2012, 10:08 PM EST) -- Motors Liquidation Co. on Thursday asked a New York bankruptcy court to equitably subordinate a slew of hedge fund noteholders' claims in its Chapter 11 proceedings based on a $367 million settlement signed the same day, but hours after, it filed for bankruptcy.

In its adversary proceeding, the former General Motors Corp. says the hedge funds bullied it into signing the agreement, which includes the $367 million cash payment as well as the allowance of $2.67 billion in claims against old GM’s estate. Before the agreement,...
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