May 12th, 2009 by Ross Edwards
Any doubts about GM’s impending bankruptcy were laid to rest this week when GM publicly disclosed that six of the top executives, including VP Bob Lutz, sold off all of their shares in the company just after the quarterly earnings report was released. GM’s quarterly earnings report.
GM CEO Fritz Henderson said that it’s “more probable” that GM will need to file for bankruptcy now than he had previously thought.
Executives are only allowed to trade just after the company’s finances are disclosed in order to prevent insider trading. This trading window was probably the last chance executives will have to dump their stocks before June 1, the deadline for GM’s restructuring.
GM’s stocks have lost 93 percent of their value in the last year, according to Bloomberg. The shares will be worthless if GM files bankruptcy.
Lutz’ shares sold for just 130,989.60, or $1.61 each. GM’s North America president Troy Clarke sold his shares at $1.41 a piece, for a total of $31,001. It might be hard to summon sympathy for GM’s leadership, but they probably took those shares as a part of their salary in better times, so they are all out a substantial amount of money.
GM has until June 1 to meet the restructuring goals set by the government as part of their bailout loans, but when the top echelon of the company starts cutting their personal losses, it’s pretty much over.
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