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 not with GM profits (in reality, SEC filings reveal GM anticipated to have negative net cash flows within the fourth quarter of 2009) but instead from GM making use of a multi-billion-dollar TARP-funded escrow account.
« Therefore, it really is uncertain just just how GM plus the management may have accurately established yesterday that GM repaid its TARP loans in just about any way that is meaningful » Grassley penned within an April 22, 2010, page to Geithner. « In reality, it seems like GM simply utilized one way to obtain TARP funds to settle another. The taxpayers will always be in the hook, and whether TARP funds are eventually restored depends totally regarding the federal federal government’s power to offer GM stock as time goes by. Treasury has simply exchanged a right that is legal payment for the uncertain hope of sharing in the foreseeable future development of GM. A debt-for-equity-swap just isn’t a payment. «
Grassley’s claim in regards to the beginning associated with money accustomed repay the mortgage had been recognized by government and company officials.
Within an April 21, 2010, meeting regarding the Fox Business system, GM’s vice president, Stephen Girsky, had been asked if GM is merely spending the us government right back with federal government cash.
« This is certainly, in place real, » Girsky stated. « But an ago, nobody thought we’d be able to pay this back year. They offered us 5 years to repay it, we are paying it back nine months. That is one action over the means within the road to recovery right right right here. »