An environmental trust created to manage the cleanup of hazardous waste left behind at former GM sites says the “old” GM has failed to pay $13.5 million it promised as part of its bankruptcy case.
After the 2009 restructuring, which transferred the company’s most valuable assets to a newly created entity called General Motors Company, the unwanted remains of the automaker’s old business were left behind in Chapter 11, including 89 former sites and plants. Most of these, located in the abandoned auto communities of the Midwest and Northeast, are known to have been contaminated with hazardous substances.
In order to clean those areas, the Revitalizing Auto Communities Environmental Response Trust was founded, with the old GM having to pay $625.2 million in cash to fund it. However, the bankruptcy estate shortchanged the trust by $13.5 million by giving it a portfolio of U.S. Treasury bonds instead of cash, according to lawyers for the trust.
“The increase in the fair market value of the transferred securities since the effective date cannot support a refusal by debtors to make full payment any more than a decrease in fair market value could support a demand by the trust and settling governments that debtors pay extra,” a trust’s lawyer was quoted as saying by the Wall Street Journal. The trust is demanding the $13.5 million plus interest from the old GM.