Apart from 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 maybe perhaps not with GM profits (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 of a multi-billion-dollar TARP-funded escrow account.
“consequently, its confusing exactly exactly how GM therefore the management might have accurately established yesterday that GM repaid its TARP loans in every significant method, ” Grassley published within an April 22, 2010, page to Geithner. “the truth is, it seems like GM simply utilized one way to obtain TARP funds to settle another. The taxpayers will always be from the hook, and whether TARP funds are fundamentally restored depends totally from the federal federal government’s capability to offer GM stock as time goes by. Treasury has just exchanged a legal directly to payment for the uncertain hope of sharing as time goes on development of GM. A debt-for-equity-swap just isn’t a payment. “