GM » Topics » Conditions and Approvals on the Pending Sale of the Controlling Interest in GMAC

This excerpt taken from the GM 10-Q filed Aug 8, 2006.
Conditions and Approvals on the Pending Sale of the Controlling Interest in GMAC
As disclosed in Note 2, the Purchase and Sale Agreement (the “Agreement”) by GM, GMAC, and the consortium sets forth a number of conditions to the Purchaser’s obligation to consummate the GMAC transaction. These conditions include, among others, reasonable satisfaction by the consortium, from the Pension Benefit Guaranty Corporation (“PBGC”), that after the closing of the GMAC transaction, GMAC and its subsidiaries will not have any liability with respect to benefit plans of GM that are subject to the Employee Retirement Income Security Act of 1974 (“ERISA”).
The consortium has informed GM and GMAC that they deem this condition has been satisfied by a letter from the PBGC stating that it will not as a result of the GMAC Transaction take action under ERISA to terminate GM’s pension plans or impose liability on the Purchaser, any of the LLC Members, GMAC, or any of its subsidiaries.
On July 28, 2006, the Federal Deposit Insurance Corporation (the FDIC) announced a six-month moratorium on final decisions on notices filed under the Change in Bank Control Act with regard to industrial loan companies (ILC). In connection with the sale of the controlling interest in GMAC, a notice was submitted to the FDIC. It appears the timing of any approval by the FDIC is likely to be affected by the moratorium. GM and GMAC are now working with the consortium to consider ways to try to avoid delaying the targeted closing date until 2007, since FDIC regulatory approval is a condition of the Agreement.
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