8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): April 18, 2017

Motors Liquidation Company GUC Trust

(Exact Name of Registrant as Specified in Charter)

Delaware	1-43	45-6194071
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
c/o Wilmington Trust Company, as trust administrator and trustee Attn: David A. Vanaskey Jr., Vice President Rodney Square North 1100 North Market Street Wilmington, Delaware		19890-1615
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (302) 636-6019

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use

the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously disclosed, including most recently in the Motors Liquidation Company GUC Trust Quarterly Report on Form 10-Q filed on February 13, 2017 (the “December 2016 10-Q”), the Motors Liquidation Company GUC Trust (the “GUC Trust”) pays the reasonable litigation defense costs (the “Avoidance Action Defense Costs”) of JPMorgan Chase Bank, N.A. (in such capacity, the “Term Loan Agent”) as defendant in an action titled Official Committee of Unsecured Creditors of Motors Liquidation Co. v. JPMorgan Chase Bank, N.A. et al., Adv. Pro. No. 09-00504 (Bankr. S.D.N.Y. July 31, 2009) (the “Term Loan Avoidance Action”), subject to the GUC Trust’s and/or the DIP Lenders’ (as defined in the December 2016 10-Q) rights to seek disgorgement of the Avoidance Action Defense Costs under certain circumstances. On April 18, 2017, the GUC Trust announced that it had reached an agreement with the Term Loan Agent with respect to the payment of Avoidance Action Defense Costs.

Background

As previously disclosed, including most recently in the December 2016 10-Q, on December 15, 2011 the GUC Trust received the benefit of approximately $42.8 million in cash (the “Residual Wind-Down Assets”) which was designated for the satisfaction of administrative expense claims (including but not limited to the Avoidance Action Defense Costs), priority tax claims, priority non-tax claims and secured claims that remained outstanding against the estates of Motors Liquidation Company and its affiliated debtors at that time (collectively, the “Residual Wind-Down Claims”). As previously disclosed, including most recently in the December 2016 10-Q, to the extent that the Residual Wind-Down Assets are, at any time, insufficient to satisfy all valid Residual Wind-Down Claims (including but not limited to Avoidance Action Defense Costs), such claims shall be paid with cash held by the GUC Trust that would otherwise be distributable to holders of the units of contingent beneficial interest in the GUC Trust (“GUC Trust Distributable Cash”). As previously disclosed in the December 2016 10-Q, the GUC Trust held $13.7 million in Residual Wind-Down Assets as of December 31, 2016, but anticipated that Residual Wind-Down Claims (including Avoidance Action Defense Costs) would exceed such assets, and would thus need to be satisfied with GUC Trust Distributable Cash. In that regard, the GUC Trust disclosed in the December 2016 10-Q that it had increased its reserves for Residual Wind-Down Claims by approximately $6.5 million to account for such potential shortfall of Residual Wind-Down Assets.

Agreement With the Term Loan Agent

On April 18, 2017, the GUC Trust entered into a letter agreement with the Term Loan Agent (the “Letter Agreement”) which, among other things, has the effect of capping the GUC Trust’s obligation to fund Avoidance Action Defense Costs in an amount that does not exceed the Residual Wind-Down Assets currently held by the GUC Trust until such time, if any, as the Term Loan Avoidance Action is fully and finally resolved by court order or settlement, which court order or settlement satisfies certain conditions as set forth below and in the Letter Agreement.

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The key economic terms of the Letter Agreement are as follows:

• The GUC Trust is required to promptly pay, from Residual Wind-Down Assets, $6,605,448.96 to the attorneys for the Term Loan Agent, which amount represents unpaid Avoidance Action Defense Costs for the months of December 2016, January 2017, and February 2017 (the “Unpaid Avoidance Action Defense Costs”);

• The GUC Trust is required to promptly pay any reasonable Avoidance Action Defense Costs accrued by the Term Loan Agent for the months of March 2017 and thereafter, up to a cap of $4,200,000 (the “Cap”), which amount represents the remainder of Residual Wind-Down Assets that will be held by the GUC Trust following payment of the Unpaid Avoidance Action Defense Costs and certain other outstanding Residual Wind-Down Claims.

• The GUC Trust is relieved of its obligations to satisfy any Avoidance Action Defense Costs in excess of the Cap until such time, if any, that the Term Loan Avoidance Action is resolved in full (by final court order or by settlement), which court order or settlement contains a determination that the Term Loan Agent was oversecured with respect to the loan which is the subject of the Term Loan Avoidance Action, or otherwise contains an agreement with respect to payment of the Avoidance Action Defense Costs (a “Trigger Event”).

Accordingly, unless and until a Trigger Event occurs, the GUC Trust shall have no obligation to satisfy Avoidance Action Defense Costs using GUC Trust Distributable Cash. A copy of the Letter Agreement is furnished as Exhibit 10.2 to this Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is furnished with this Form 8-K.

Exhibit No.	Description
10.2	Letter Agreement Between the GUC Trust and the Term Loan Agent

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 19, 2017

MOTORS LIQUIDATION COMPANY GUC TRUST
By: Wilmington Trust Company, not in its individual capacity, but solely in its capacity as trust administrator and trustee of the Motors Liquidation Company GUC Trust
By:	/s/ David A. Vanaskey
Name:	David A. Vanaskey
Title:	Vice President of Wilmington Trust
	Company

EXHIBIT INDEX

Exhibit No.	Description
10.2	Letter Agreement Between the GUC Trust and the Term Loan Agent

5

EX-10.2

Exhibit 10.2

	Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, NY 10166-0193 Tel 212.351.4000 www.gibsondunn.com
	Matt J. Williams Direct: +1 212.351.2322 Fax: +1 212.351.5232 MJWilliams@gibsondunn.com Client: 98520-00018

April 18, 2017

VIA ELECTRONIC MAIL

Harold S. Novikoff

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, NY 10019

Re: GUC Trust Payments on Account of Avoidance Action Defense Costs

Dear Hal:

Reference is made to (i) the Second Amended Joint Chapter 11 Plan of Motors Liquidation Company et al., f/k/a General Motors Corp., et al. (“Plan”), (ii) the order confirming the Plan (“Confirmation Order”), (iii) the Second Amended and Restated Motors Liquidation Company GUC Trust Agreement (“GUC Trust Agreement”), and (iv) the Final Order Pursuant to Code Sections 105(a), 361, 362, 363, 364 and 507 and Bankruptcy Rules 2002, 4001 and 6004 (A) Approving a DIP Credit Facility and Authorizing the Debtors to Obtain Post-Petition Financing Pursuant Thereto, (B) Granting Related Liens and Super-Priority Status, (C) Authorizing the Use of Cash Collateral and (D) Granting Adequate Protection to Certain Pre-Petition Secured Parties (the “DIP Order”).¹ This firm represents Wilmington Trust Company in its capacity as GUC Trust Administrator and we understand that you represent JPMorgan Chase Bank, N.A. as agent (“Agent”), in the Term Loan Avoidance Action.

Paragraph 19(c) of the DIP Order provides that the Debtors shall, subject to certain limitations and procedures, pay the reasonable fees and expenses incurred by the Agent in “responding to [a Committee] investigation or in defending any challenge to such liens or [the Agent’s] ability to retain any Payment” (“Reimbursable Defense Payments”). Pursuant to the statements made on the record at the hearing related to confirmation of the Plan, the Debtors’ obligation to make the Reimbursable Defense Payments were assumed by the GUC Trust following the dissolution of the Debtors. Pursuant to paragraph 45 of the Confirmation Order, the DIP Lenders and the GUC Trust Administrator expressly reserved the right to request disgorgement of the Reimbursable Defense Payments “in the event a Final Order is

¹  Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Plan or GUC Trust Agreement, as applicable.

Beijing • Brussels • Century City • Dallas • Denver • Dubai • Frankfurt • Hong Kong • Houston • London • Los Angeles • Munich

New York • Orange Country • Palo Alto • Paris • San Francisco • São Paulo • Singapore • Washington, D.C.

Harold S. Novikoff

<April 18, 2017>

Page 2

entered against JPMorgan in the Term Loan Avoidance Action.” As potential Allowed Administrative Expenses, Reimbursable Defense Payments are to be made first from the Residual Wind-Down Assets, and, if the Residual Wind-Down Assets are depleted, from Excess GUC Trust Distributable Assets. There is currently $11,710,237.20 in cash held by the GUC Trust as Residual Wind-Down Assets, of which $899,237.98 has been allocated to claims unrelated to the Term Loan Avoidance Action.

The Term Loan Avoidance Action is ongoing. Accordingly, from time to time, the Agent has submitted invoices to the GUC Trust Administrator on account of Reimbursable Defense Payments, and the GUC Trust Administrator has, after reviewing such invoices, made payments from the Residual Wind-Down Assets on account thereof.

To date, the GUC Trust Administrator has not made Reimbursable Defense Payments for the months of December 2016, January 2017, February 2017 or any period thereafter. The aggregate amount of the invoices submitted for December 2016, January 2017, and February 2017 is $6,605,448.96.

By signing the below, the GUC Trust Administrator agrees that the GUC Trust Administrator will promptly (and in no event later than 5 business days from the full execution of this letter agreement) pay to the respective firms that submitted the unpaid invoices referred to above the sum of $6,605,448.96 on account of Reimbursable Defense Payments accrued during the months of December 2016 through February 2017. In addition, the GUC Trust Administrator agrees that the GUC Trust Administrator will timely pay the Reimbursable Defense Payments on a going forward basis for any Reimbursable Defense Payments accrued during a time period after February 2017, up to $4,200,000 in the aggregate (the “Reimbursable Defense Payment Cap”).

By signing below, the Agent agrees that, until the Trigger Date (as defined below), the GUC Trust and the GUC Trust Administrator shall have no obligation to make Reimbursable Defense Payments in excess of the Reimbursable Defense Payment Cap. The “Trigger Date” is the earliest to occur of the date on which (a) the Bankruptcy Court (or an appellate court of competent jurisdiction) enters a final, unstayed, non-appealable order that (i) resolves the Term Loan Avoidance Action in full, and (ii) contains a determination to the effect that value of the collateral in which the Term Lenders had an enforceable security interest to secure the Term Loan exceeded the amount of the postpetition payment of fees, principal and interest on the Term Loan pursuant to the DIP Order, (b) the Term Loan Avoidance Action is otherwise fully and finally resolved, either judicially (by a final, unstayed, non-appealable order of a court of competent jurisdiction), or by a settlement agreement, to which the GUC Trust Administrator is a party, that has become effective in accordance with its terms, and in either case in a manner reasonably consistent with a determination, agreement or finding to

Harold S. Novikoff

<April 18, 2017>

Page 3

the same effect, or (c) the Term Loan Avoidance Action is fully and finally resolved by a settlement agreement, to which the GUC Trust Administrator is a party, providing for payment of Reimbursable Defense Payments that has become effective in accordance with its terms. The GUC Trust Administrator agrees that following the occurrence of the Trigger Date, it shall promptly pay (or reimburse the Agent in respect of), upon submission of invoices therefor, any Reimbursable Defense Payments that it has not theretofore paid. For the avoidance of doubt, the GUC Trust Administrator shall, if the Residual Wind-Down Assets are exhausted, cause the amounts required for such Reimbursable Defense Payments to be funded from amounts that would otherwise be distributable to beneficiaries of the GUC Trust.

Nothing herein is intended to be, nor shall be construed to be, a waiver of any reservation of rights contained in paragraph 45 of the Confirmation Order by which the DIP Lenders and the GUC Trust Administrator may seek to challenge payment or request disgorgement of professional fees paid to the Agent, or any related defenses of the Agent with respect to such challenge or request for disgorgement.

By signing below, each of Gibson, Dunn & Crutcher, LLP and Wachtell, Lipton, Rosen & Katz represent that they have the requisite authority to bind the GUC Trust Administrator and the Agent, respectively, to the terms set forth herein.

Sincerely,

    /s/ Matthew J. Williams

Matthew J. Williams

Gibson, Dunn & Crutcher LLP

on behalf of the Motors Liquidation Company GUC Trust Administrator

ACCEPTED AND AGREED

    /s/ Harold S. Novikoff

Harold S. Novikoff, Esq.

Wachtell, Lipton, Rosen & Katz

on behalf of JPMorgan Chase Bank, N.A. as Agent