“The way to obtain that has been an equity money center. That’s fundamentally money that is escrow” Barofsky said.
Besides the outstanding stock problem, Whitacre’s statement has arrived under fire from Sen. Chuck Grassley, R-Iowa, who notes that the loans had been repaid maybe perhaps not with GM earnings (in reality, SEC filings reveal GM likely to have negative net cash flows within the 4th quarter of 2009) but alternatively from GM making use https://installmentloansgroup.com/ of a multi-billion-dollar TARP-funded escrow account.
“consequently, its uncertain just how GM additionally the management might have accurately established yesterday that GM repaid its TARP loans in every way that is meaningful” Grassley penned within an April 22, 2010, page to Geithner. “the truth is, it appears to be like GM simply used one way to obtain TARP funds to settle another. The taxpayers continue to be regarding the hook, and whether TARP funds are eventually restored depends totally from the government’s capability to offer GM stock as time goes by. Treasury has simply exchanged a legal directly to payment for an uncertain hope of sharing later on development of GM. A debt-for-equity-swap just isn’t a payment. “