University of Cincinnati Law Review Volume 85 Issue 1 Article 4 August 2018 The $1.5 Billion General Motors Recalls at the Dangerous Intersection of Chapter 11, Article 9, and TARP Sally McDonald Henry Follow this and additional works at: https://scholarship.law.uc.edu/uclr Recommended Citation Sally McDonald Henry, The $1.5 Billion General Motors Recalls at the Dangerous Intersection of Chapter 11, Article 9, and TARP, 85 U. Cin. L. Rev. (2018) Available at: https://scholarship.law.uc.edu/uclr/vol85/iss1/4 This Article is brought to you for free and open access by University of Cincinnati College of Law Scholarship and Publications. It has been accepted for inclusion in University of Cincinnati Law Review by an authorized editor of University of Cincinnati College of Law Scholarship and Publications. For more information, please contact
[email protected]. Henry: The $1.5 Billion General Motors Recalls THE $1.5 BILLION GENERAL MOTORS RECALLS AT THE DANGEROUS INTERSECTION OF CHAPTER 11, ARTICLE 9, AND TARP Sally McDonald Henry* I. INTRODUCTION: THE COMPACT VERSION This article discusses how, in the General Motors Corporation (General Motors or GM)1 chapter 11 case, a group of creditors—mostly collateralized loan obligations, hedge funds, pension, and other funds2— (the Funds or the Lenders3) were paid in full, in cash, even though they had no right to the payment, which amounted to almost $1.5 billion. Not only were the Funds paid in full, but in addition, their collateral agent, JPMorgan Chase Bank, N.A. (JPMorgan), is being reimbursed for millions of dollars of legal fees, even though it has no legal right to the reimbursement.4 These improper payments occurred (and continue to occur) even though many other creditors—unsecured bondholders,5 tort creditors, mom and pop business whose existence depend on being paid * Associate Professor, Texas Tech School of Law.