Time for a VEBA Death Watch?
Showing a Farago-like faith in GM's future, a current GM employee and retiree have challenged the use of a $4.4b "convertible note" as part payment for the VEBA health care superfund in the new United Auto Workers (UAW) contract with The General. According to the Detroit News, the complainants are concerned that the trust fund would be at risk should GM file for bankruptcy. In a letter filed with the Securities and Exchange Commission, the workers said GM hasn't disclosed enough information about the note and should have released a formal prospectus. Their suit also states that the details given "fell dramatically short of the standards" for such a transaction. Although GM is "confident" they "complied with all applicable securities laws," this is just one more case the SEC will add to their list of GM accounting investigations. (You didn't think we forgot, did you?)
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"Note" is just fancy wording for an IOU. Who would be concerned about taking a $4.4B IOU from GM ? :)
The picture caption is a scream.