Deals
Hedge Funds Used Obscure Bond Bet to Win in GM’s Bankruptcy
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General Motors Corp.’s bankruptcy, which wiped out shareholders and left taxpayers on the hook for billions of dollars, is generating a new wave of profit for hedge funds that supersized their claim by betting on an obscure pool of GM debt issued in the Canadian province of Nova Scotia.
A settlement reached last week proposes giving Fortress Investment Group LLC, Elliott Management Corp. and other holders of GM Nova Scotia notes a $1.55 billion bankruptcy claim on $1.07 billion in debt. Holders of that same pool of debt had earlier received $367 million in cash.