Publicis Groupe exposure to GM’s bankruptcy.

General Motors, Monday June 1st, filed a petition for protection under Chapter 11 with the U.S. Bankruptcy Court in order to restructure its business. The premise of GM’s restructuring plan is the sale of its businesses to a new company free from many of GM’s legacy obligations.

GM asked the bankruptcy Court to grant “essential vendor” status to certain of its suppliers and to establish procedures for the assumption and assignment of certain contracts to the new company, and the bankruptcy court has agreed in principle with that concept. GM has authority from the court to grant “essential vendor” status to certain contracts, and has indicated that it will ask the court to approve the assumption and assignment of the bulk of its contracts to the new company. In both instances, GM has said in its bankruptcy filings that it expects to pay those vendors. The agencies of Publicis Groupe which work with GM has been asked to continue to work with GM through the bankruptcy. In the event Publicis Groupe agencies either are deemed essential or have their contracts assumed if the GM sale is approved, our agencies will have an important protection that reduces their exposure to the risk of non-payment of their debts in connection with GM before the date of the petition for protection, and assures a good relationship with the new company.