Besides the outstanding stock problem, Whitacre’s statement has arrived under fire from Sen. Chuck Grassley, R-Iowa, whom notes that the loans had been paid back maybe not with GM profits (in reality, SEC filings reveal GM likely to have negative net cash flows within the 4th quarter of 2009) but instead from GM making use of a multi-billion-dollar TARP-funded escrow account.
“consequently, it really is uncertain exactly exactly how GM in addition to Administration might have accurately established yesterday that GM repaid its TARP loans in virtually any meaningful method, ” Grassley composed in a April 22, 2010, letter to Geithner. “the truth is, it appears to be like GM simply utilized one way to obtain TARP funds to settle another. The taxpayers are nevertheless in the hook, and whether TARP funds are eventually restored depends completely in the federal federal government’s power to offer GM stock as time goes on. Continue reading