General Motors filed bankruptcy papers Monday in a New York court, revealing the extent to which the company owes a variety of advertising agencies that buy airtime on behalf of the firm. TV companies which sell the airtime are still waiting on payment from the car company via its agency partners.
The list, filed Monday with the United States Bankruptcy Court in the Southern District of New York, reveals that top 50 creditors to the car giant include Starcom MediaVest Group in Chicago. The agency is claiming some $121.5 million and is listed as the No. 6 creditor. Starcom’s parent company, Publicis Groupe is also owed $25 million and is listed at No. 18. Interpublic Group, the owner of Universal McCann, which also buys time for General Motors, is owed almost $16 million and ranks as the 20th creditor on the list.
The broadcast networks, cable channels, syndicators and TV station groups must wait until their agency partners get paid by the marketer before they can recoup any lost dollars. One broadcast network has described the bankruptcy as a 'big issue.' The filing, which follows that of Chrysler, has prompted a debate between media buying agencies and their TV partners over liability and who gets paid when, and who is a preferred supplier.