Lawsuit Could Undo Sale That Created New GM, Company Says

The new General Motors Co. could be undone by a lawsuit that pits general creditors against hedge funds including Elliott Management Corp. and Fortress Investment Group LLC over $3 billion, the car company said in a lawsuit that went to trial today.

A trust for creditors of the old, bankrupt part of the auto-maker now known as Motors Liquidation Co. sued the hedge funds in Manhattan bankruptcy court in March, alleging that while GM was preparing its bankruptcy filing on June 1, 2009, four hedge funds, which held notes in a Canadian unit of GM, “saw an eleventh-hour opportunity for profit and pounced.”