Creditors of General Motors Co.’s bankrupt predecessor, who made about $5 billion in the automaker’s $20 billion initial public offering, might be able to buy millions more new shares for as little as a third of yesterday’s price, reported Bloomberg.

GM’s bankrupt estate was issued 150 million shares, or 10 percent of the new company’s stock, to help pay creditors claiming an estimated $37 billion. At yesterday’s closing price of $34.19, that stock is worth about $5.1 billion.

So-called Old GM has warrants that entitle it to buy about 273 million shares at between $10 and about $18 each, according to the company’s Nov. 17 filing with the U.S. Securities and Exchange Commission. If the shares rise, creditors stand to make even more.

“The stock was certainly worth more than almost anyone thought at the time,” said Chip Bowles, a bankruptcy lawyer at Greenebaum Doll & McDonald PLLC in Louisville, Kentucky.

Old GM filed for bankruptcy in June 2009. New GM’s Chevrolet Volt was just named Motor Trend Magazine’s 2011 Car of the Year.

GM fell 34 cents to $33.86 at 11.33 a.m. in New York Stock Exchange composite trading. It rose as high as $35.99 before closing yesterday at 3.6 percent above the initial offering price.

Motors Liquidation

Over-the-counter shares of Old GM, known as Motors Liquidation Co., rose 7.3 percent to almost 19 cents. Kirk Ludtke, a senior vice president at the Stamford, Connecticut- based brokerage firm CRT Capital Group LLC, said he values the new GM at $45 a share.

Old GM is still counting up creditor claims, which stood at $35.7 billion on Sept. 30, according to its last monthly report. If unsecured claims are certified at $37 billion, as the new GM said it expects in IPO documents this month, the estate would get at least 10 million new GM shares.

If claims against old GM reach as high as $42 billion, creditors could get as many as 30 million new shares, according to the IPO documents.

“Without the bankruptcy there would be a high probability that GM as we knew it would have been disassembled, dismembered, and you wouldn’t have this American icon still in existence,” said Harvey Miller, a lawyer with New York-based Weil Gotshal & Manges LLP who helped GM with its bankruptcy.

Bonds Fall

Old GM creditors’ stake in the new automaker is dwarfed by that of the U.S. Treasury, which bailed it out with $50 billion, and got 61 percent, and the United Auto Workers retiree health- care trust, which has 20 percent.

Old GM’s 8.375 percent bonds due in July 2033 fell for the fourth day and were at 31.75 cents on the dollar, off 1.25 cents at 12.07 p.m. today in New York, according to Trace, the Financial Industry Regulatory Authority’s bond-pricing service.

“The big issue that will be debated for a long time is whether the value being raised in the IPO is really value that should have been part of the estate for old creditors,” said Michael P. Richman, chairman of Patton Boggs LLP’s restructuring practice, who represented bondholders challenging the government’s plan for GM in June 2009.

Cadillac, Chevrolet

When old GM filed for bankruptcy, it sold its best assets, including its Cadillac and Chevrolet divisions, to a new company. Unwanted properties, such as outmoded factories and its Saturn division, were left under bankruptcy-court protection and are to be liquidated under a plan that repays loans from the U.S. Treasury and Canada.

An ad hoc committee of GM bondholders that held about 54 percent of the carmaker’s $27 billion in bond debt agreed to support a plan that swapped debt for equity. A committee that called itself the “Unofficial Committee of Family & Dissident GM Bondholders,” and included three individuals holding $2.3 million in bonds, had objected to GM’s sale of its good assets to a Treasury-funded entity. They were denied court permission to form a committee in the bankruptcy case.

“Its great that all this money’s being raised, it’s too bad people who held $27 billion of bonds, many of whom were retirees of GM, couldn’t participate,” said Thomas Lauria, a White & Case LLP lawyer who represented dissident creditors in the bankruptcy of Chrysler.

Shot in Arm

While the IPO revenue is a shot in the arm for creditors of old GM, which was renamed Motors Liquidation Co., the amount of yet unrecognized environmental and other claims may dilute ultimate recoveries.

A proposed plan to distribute the bankrupt estate’s assets was provisionally approved by U.S. Bankruptcy Judge Robert Gerber in New York on Oct. 21.

A proposed GM environmental settlement would set aside $773 million to resolve claims by the federal government and 14 states. A mix of cash and assets, put into trusts, would cover cleanup at 89 properties, with more than half the money going to New York and Michigan.

The U.S. didn’t give a total estimate of what it claimed GM should owe for cleanup costs, and the Environmental Protection Agency makes claims based on potential liabilities that are often shared among multiple “potentially responsible parties.” Two units of the defunct carmaker formed to hold environmental liabilities owed about $1.2 billion in cleanup costs, according to court documents.

GM’s estate estimated it has $648 million in asbestos liability. A committee of creditors said in court filings that the amount may be five to 10 times that much. Creditors are seeking court permission to investigate General Motors and other non-bankrupt companies in order to estimate their potential asbestos claim.