04.05.2011
Motors Liquidation Company Ceases Trading
original article written by Net Advisor™
The “old (and the original) General Motors” stock that became Motors Liquidation Company (MTLQQ) ceased trading on March 31, 2011. Last trade was a mere four cents with the company losing $56.85 per share (PDF screen shot).
I first starting writing about GM publicly on or about June 2008 where I began answering questions people had about GM, and the auto industry. GM was probably the most frequently asked question I received when doing volunteer work on Yahoo! Answers. Eventually I posted links to my 78 GM answers history (I stopped counting GM answers after that).
One of the reasons I had become so bearish on GM was the last major “sell signal” occurred in 2008 (chart above – see red arrow pointing down “MACD Sell Signal”). Charts are not 100% correct but this one was pretty accurate.
I also was closely watching a number of factors such as the (most important) – the 425% increase in the FED Funds Rate from 2004-2006, watching home prices peak no later than the spring 2006; noted the Bear Sterns sub-prime hedge funds collapse in Spring 2007, and a number of other signs (all of which I will discuss at another time). The writing really had been on the wall for GM since at least by Spring 2008 (Chart below).
“Old” GM’s stock peaked around the Dot-com Crash of 2000-2002 and the stock never recovered since. In August 2009, I published Motors Liquidation Company (MTLQQ) FAQ – everything one might want to know about what going on with “old” GM stock. One of the things I pointed out was that this stock would likely become worthless.
“Eventually, and upon completion of the bankruptcy, the stock by all projected accounts, will cease trading and become worthless….”
— Source: Net Advisor™ 08-14-2009
Yes, I’m quoting myself now.
So old GM became Motors Liquidation Company (MLC) (Stock: MTLQQ) exited bankruptcy on March 31, 2011, and ceased trading the same day. MLC split into four trusts. MLC does own about 10% of new GM stock, but like I had warned, don’t expect to get any new GM stock if one owns shares in MTLQQ.
1st Trust – Will go to “resolving claims of the debtors’ unsecured creditors…and distribution of new GM stock.” Unless you sold something to GM and they didn’t pay you for it, odds are one is not getting any money from this pot.
2nd Trust – Deals with “environmental” issues on old GM owned real estate. If the EPA hasn’t claimed all of this in the way of fines, penalties, etc, I’m sure they will. If one doesn’t have environmentally-related issues as a result of old GM properties, odds are one is not getting any money from this pot either.
3rd Trust – To address existing and future asbestos-related claims. If one doesn’t have a current or expected future risk of asbestos exposure and can prove GM caused one’s health problems, odds are one is not getting any money from this pot either.
4th Trust – The last and final place to try and collect money from old GM is the pot that will undoubtedly end up with the least amount of assets, if any. This will be the “left overs” of remaining assets from the above three trusts. This trust to handle the unknown amount of shareholder lawsuits and otherwise, “litigation claims.”
— Source: Reuters
Before suing MLC from holding on to technically worthless “old GM” stock, best go discuss this with a licensed securities lawyer first. According to MLC’s website, one had until February 10, 2010 to file a claim against the entity.
“On December 18, 2009, a supplemental Property Bar Date Order was entered establishing February 10, 2010 at 5:00 p.m. (Eastern Time) as the deadline to file proofs of claim (“Property Proofs of Claim”) against the Initial Debtors by entities residing (the “Residents”) adjacent to or in the proximity of the material manufacturing properties of the Debtors as set forth on Exhibit “A” annexed to the Property Bar Date Order (the “Properties”).”
— Source: Motors Liquidation Company
What to Do With Old Physical GM Stock?
Old GM stock certificates are available on eBay with current asking prices from $2.99 and up, however there doesn’t seem to be a lot of buyers here either. As for collectors, I probably won’t count on the old stock certificate to be worth a fortune in the future. Take a look at what was the hot stock of the “old days” – the Rail Roads. Those certificates are available (as of post date) for about $1.00, which is $1.00 more than they are actually worth.
Never Sold “old GM” Stock? A Possible Consolation Prize.
If one never sold “old” GM stock, or MTLQQ in a taxable account, talk to your professional tax advisor about how to deduct these losses from your tax return. If “old GM” stock, or MTLQQ was held in an IRA (such as a Roth, SEP, SAR-SEP, SIMPLE, or other IRA), or in any other qualified retirement account, there is no write-off of the losses. Ouch!
The Future of New GM
So we are finally closing the final chapter in MLC (“old GM”) stock. As for new GM stock, it’s too early to call its future. GM received more money from government bailouts second only to AIG (not including Fannie May or Freddie Mac’s unknown and ongoing bailout total). GM also claimed to repay their debts, but don’t buy into that argument. The Obama Administration orchestrated all the auto bailouts (except for Ford who didn’t need a bailout) handed new GM 20 years of tax credits worth of about $45 Billion right before their new IPO. With government backing, restructured debt, pensions, healthcare, and zero taxes on profits for what may be the next 20 years, GM better make money.
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