Last week I was lucky enough to get to see Al Koch speak. He is very much involved in the restructuring of General Motors, and has been for the past year or so. He started out as an public accountant, so it is very interesting to see where he ended up.

To relate this all back to taking the CPA exam, Mr. Koch scored the highest cumulative score on the CPA exam back when he took it, winning the Elijah Watts Sells Award. Ten people get this award each year, but Mr. Koch won the gold prize for the CPA exam 1965.

So, while passing the CPA is the important thing, and no one really cares if you get a 76 or an 86, if you do happen to score ridiculously well, you get a whole lot of recognition for it.

Mr. Koch currently works for Alix Partners, a consulting firm that performs “Corporate Turnaround and Restructuring” which is a nice way of saying they help salvage what’s left of bankrupt companies.

His explanation of how the General Motors restructuring was handled was really fascinating. Apparently, they formed a new company, which I’ll call New GM, which took all of the good, useful assets away from Old GM

Old GM, is now left with all the bad, useless assets, and is now called Motors Liquidation. Mr. Koch’s role is now as CEO of Old GM. This involves environmental cleanup of properties, and trying to get rid of acres of factory floorspace.

In addition, Old GM owns some random assets like a 9 hole golf course in New Jersey, and some residential property that used to be contaminated (requiring GM to purchase it) but which is supposedly now safe to live on (so they’re selling those houses off at deep discounts.)

You can read more about this “garage sale” in this article from Bloomberg.

It’s kind of funny–Old GM is worth nothing. Even if it made a profit on selling these assets after the high costs of clean-up, any excess goes straight to the Treasury. Mr. Koch has made this clear to investors on the Old GM website and on public radio, etc. However, every time New GM announces something, like a new car model, the stock price of Old GM fluctuates.

So day traders, if you’re going to buy a stock, make sure you’re buying the right company!