Yesterday, in a filing with the Securities and Exchange Commission, General Motors announced that it is currently attempting to restructure debt held by the U.S. Treasury Department. Under a current proposal, GM would convert at least 50% of its debt held by the U.S. Treasury Department into common shares. As a result of the conversion Treasury would hold greater than 50% of GM’s common shares.

Today, the House Financial Services Committee, chaired by Representative Barney Frank (D-MA), held a hearing on the effects of the Lehman Brothers bankruptcy on state and local governments and other publicly-funded entities.

Testifying at the hearing were the following witnesses:

Panel One:

On Thursday, AIG announced a $4.35 billion loss for the first quarter of 2009, as compared to a net loss of $7.81 billion in the first quarter of 2008 and a net loss of $61.7 billion in the fourth quarter of 2008.

As widely reported, on April 30, 2009, (the Petition Date), Chrysler LLC and its 24 domestic and indirect subsidiaries (the Debtors) filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the Court).

This morning, General Motors Corp. (GM) announced that it filed for Chapter 11 bankruptcy in the U.S.

General Motors and Affiliates File for Chapter 11 Bankruptcy Protection

This morning, General Motors Corp. (GM) announced in a Form 8-K filing that the U.S. Treasury Department has proposed details of a reorganization plan to GM in the event that GM seeks bankruptcy protection and bankruptcy court approval for the sale of substantially all of its assets to a newly organized company (New GM) pursuant to Section 363 of the Bankruptcy Code (363 Sale). Following the proposed 363 Sale, the U.S.

Late last night, after presiding over a three-day hearing on the matter last week, U.S. Bankruptcy Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York issued an order authorizing the sale of substantially all of the assets of General Motors Corporation (“Old GM”) under Section 363 of the Bankruptcy Code (“Section 363 Sale”).

Today, the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law held a hearing entitled “Ramifications of Auto Industry Bankruptcies; Part II.” Testifying before the committee was Ron Bloom, Senior Advisor, U.S. Department of Treasury.

As is now well known, General Motors, Inc. and Chrysler LLC financially restructured themselves with the help of the United States Treasury. These restructurings occurred very quickly – Chrysler and GM each filed for bankruptcy and sold substantially all of their automobile-producing assets to newly created companies2 within approximately forty days. Each company used the bankruptcy process to massively deleverage and free itself from personal injury liability claims.