GM obtains ERISA prohibited transaction exemption relating to funding of new health care VEBA
Clients General Motors Company
Jones Day represented General Motors Company in obtaining a prohibited transaction exemption from the U.S. Department of Labor to allow GM to transfer company securities (including common stock, warrants to acquire common stock, preferred stock, and a note) and certain other assets to the UAW GM Retirees Medical Benefits Plan and its associated UAW Retiree Medical Benefits Trust, a voluntary employee beneficiary association (VEBA) that assumed responsibility for the provision of post-retirement health benefits for certain UAW-represented GM retirees. Jones Day also advised GM on the design, creation, and implementation of the agreements that led to the creation of the new VEBA. The exemption was retroactive to July 10, 2009, the date that GM emerged from bankruptcy and transferred the securities, and capped an extraordinary labor-management compromise that permanently shifted the responsibility of post-retirement health benefits from the company to a pre-funded VEBA and welfare plan administered by a committee independent of GM.