Corporate & Securities Law

Corp Fin Grants General Motors Relief for Debt Exchange Offers

By broc

Corp Fin Grants General Motors Relief for Debt Exchange Offers

Last week, Corp Fin granted General Motors exemptive relief so that GM can move fast and exchange its debt. The relief is highly unusual, but certainly seems merited under the circumstances. GM has something like 26 series of debt outstanding, the federal government has lent the company billions under the TARP/TALF program - and pursuant to the terms of those loans, the company must restructure its debt (and operations) within a limited time period.

Therefore, GM had to commence its exchange offers immediately and begin soliciting consents to postpone the maturity dates. The two primary forms of relief granted by the Staff to GM include:

- Ability to solicit consents before a definitive proxy statement has been filed; and
- Ability to cut off withdrawal rights after 20 business days, but before the exchange offers necessarily expire.

I believe similar relief was granted to Chrysler back in the early '80s under similar circumstances...

Full post as published by DealLawyers.com Blog on May 26, 2009 (boomark / email).