Apart from the outstanding stock issue, Whitacre’s statement has arrived under fire from Sen. Chuck Grassley, R-Iowa, whom notes that the loans had been paid back maybe 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 rather from GM making use of a multi-billion-dollar escrow account that is TARP-funded.
“consequently, it really is ambiguous just how GM while the management may have accurately established yesterday that GM repaid its TARP loans in just about any significant means, ” Grassley published in a April 22, 2010, page to Geithner. “In reality, it appears to be like GM simply utilized one way to obtain TARP funds to settle another. The taxpayers continue to be on the hook, and whether TARP funds are finally restored depends totally regarding the federal federal government’s power to offer GM stock as time goes on. Treasury has simply exchanged a legal straight 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. “