Tadir-Gan (Precision Products) Ltd. (TASE: TDGN) today notified the Tel Aviv Stock Exchange (TASE) that it is owed $500,000 by bankrupt General Motors Company.
Tadir-Gan said that GM and three of its US subsidiaries filed for Chapter 11 bankruptcy protection with the US Court for the Southern District of New York (Manhattan) on June 1. Tadir-Gan stated that GM owes it €352,000 (about $500,000) as of the date of the report.
Tadir-Gan manufactures machine-assembled aluminum high-pressure die cast products for the vehicle industry. Its customers include GM as well as GM's German subsidiary, Opel, which has reportedly been sold.
Tadir-Gan said that the reports in GM and GM Europe's websites state that the company is precluded by law from paying for goods and services supplied prior to the filing for bankruptcy protection. However, GM further stated that it was seeking permission from the court to pay some of its suppliers of products essential to GM's business, including payment for goods and services supplied prior to the filing for bankruptcy protection.
Tadir-Gan said that, under these circumstances, it is has doubts whether it will be able to collect its debt from GM.
Tadir-Gan noted that GM was continuing to draw goods for its use from Tadir-Gan's advance warehouse in the US. GM's websites state that payment for purchases made after the filing for bankruptcy protection will be carried out as usual.
Tadir-Gan said that GM has said that it was continuing operations in both production and marketing. Tadir-Gan said that, to the best of its knowledge, the GM plants that will be closed do not use Tadir-Gan products.
Tadir-Gan further noted that GM's subsidiaries outside the US are not included in its filing for bankruptcy protection. Therefore, suppliers to GM Europe should not affected by the filing, and they will continue business as usual. Even after GM filing for bankruptcy protection, GM Europe has continued drawing products for its use from the company's warehouses, and has paid Tadir-Gan for previously deliveries.
Tadir-Gan stated that GM Europe's current debt to the company was €810,000, as of today.
Tadir-Gan's share was unchanged at NIS 0.99 in early trading on the TASE.
Published by Globes [online], Israel business news - www.globes-online.com - on June 3, 2009
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