Ezra Merkin May Soon Be Ousted At GMAC

by Darren

Ezra Merkin may soon be ousted from his position as Chairman of GMAC, the troubled financing arm of General Motors. There’s no point in detailing the many woes facing GM and GMAC since they’ve been chronicled extensively, but suffice it to say GMAC is facing huge problems which can’t be helped by the precarious position of J. Ezra Merkin himself.

Merkin is currently in hot water due to the huge failure of his hedge fund, which invested billions of dollars with Bernard Madoff, in what is now being described as the world’s biggest Ponzi scheme.

It’s not as if his performance at the help of GMAC has been anything less than a dismal failure, either:

Merkin, 55, presided over $7.9 billion of losses at GMAC during five quarters caused by defaults on subprime mortgages and a collapse in auto sales. He closed his $1.5 billion Gabriel Capital LP last month after disclosing losses tied to Madoff, who allegedly ran a $50 billion Ponzi scheme. Gabriel and two other Merkin funds, Ascot Partners LP and Ariel Fund Ltd., face lawsuits for investing with Madoff.

As part of the TARP funds already paid out to GMAC, the company is required to pick a new seven-member board to oversee the company. It’s doubtful that Merkin will be anyone’s top pick, considering his involvement in the Madoff scheme, as well as GMAC performance under his tutelage.

The retooled board will be decided on within 90 days.