GM Set to Fight 'Economic Victims' in Bankruptcy Court -- Week Ahead

   By Joseph Checkler 
 

Tuesday in Manhattan, General Motors Co. (GM) and so-called economic victims of the auto company's ignition-switch defect will spar in court over whether GM should be on the hook for their monetary losses.

The new GM says it discarded its lawsuit liabilities when Judge Robert Gerber approved the sale of the company to the U.S. government in 2009. However, the economic-loss victims argue that General Motors ought to compensate them for things like loss of car value--in spite of the bankruptcy release--because they weren't informed of the problem by GM before the bankruptcy and weren't given the opportunity to participate in the case.

These lawsuits are separate from those about injuries or deaths linked to the ignition-switch defect. More than 30 people have died because of the issue. GM has set aside at least $400 million to compensate those injured or the families of those killed in crashes related to the ignition switch problem.

Also on Tuesday in Manhattan, NII Holdings Inc. (NIHDQ) will ask a judge to approve procedures for an auction of Nextel Mexico, with a $1.88 billion lead bid by AT&T Inc. (T).

If AT&T wins the auction, the company would possess a network that covers about 76 million people in the Mexican wireless market.

AT&T plans to integrate Nextel Mexico with Iusacell, which the telecom giant agreed to buy late last year in a deal valued at $2.5 billion at the time.

The deal for Nextel Mexico also includes all of NII Holdings' wireless properties in the country, including network assets, retail stores, three million subscribers and spectrum licenses. The proposed $1.875 billion purchase price excludes an unspecified amount of outstanding debt.

AT&T said it expects the deal to close in the middle of the year, though it is subject the auction and approvals by Mexican regulators. Auction or not, the sale itself will also need to be approved by Judge Shelley C. Chapman, NII's bankruptcy judge.

Tuesday in Camden, N.J., a bankruptcy judge will decide whether to terminate the sale of Atlantic City's Revel Casino Hotel to Glenn Straub.

Judge Gloria Burns this past Wednesday strongly hinted that she would fully terminate the sale, but stopped short of ruling. The $95.4 million sale of the property to Mr. Straub, a Florida real-estate developer, was thrown into flux after a string of court rulings favorable to former tenants and other creditors. Those rulings muddied the terms of the deal, and prompted Mr. Straub to try to extend the deadline to close the sale to Feb. 28 from Feb. 9.

Mr. Straub had planned to rebrand Revel, adding more family-friendly amenities and possibly a scaled-down casino. Mr. Straub has also discussed installing a university at the Revel site, one that would tackle complex problems like nuclear-waste disposal.

Mr. Straub has said he hoped to invest as much as $500 million to revitalize Atlantic City, but it is unclear if he will continue to pursue investments in the city without Revel.

-Tom Corrigan contributed to this article.

Write to Joseph Checkler at [e-mail]

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