GM asset sale approved late Sunday
General Motors Corp. won approval late Sunday to sell its best assets to a government-owned company, paving the way for a stunningly swift emergence from Chapter 11 bankruptcy less than 40 days after GM filed for court protection.
Once the sale closes, which is not expected before noon on Thursday, the 100-year-old automaker will be majority-owned by the U.S. Treasury Department. The government will have a 60.8 percent stake after providing more than $50 billion in financial aid to keep the iconic American company from liquidating and becoming perhaps the greatest industrial failure in the nation's history.
"GM cannot survive with its continuing losses and associated loss of liquidity, and without the governmental funding that will expire in a matter of days," U.S. Bankruptcy Judge Robert Gerber wrote in his 95-page opinion. "As nobody can seriously dispute, the only alternative to an immediate sale is liquidation -- a disastrous result for GM's creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates."
The sale will preserve hundreds of thousands of GM jobs in North America, and around the world, and bolster a reeling network of auto industry suppliers. But it also ensures a continued dismantling of GM's unwanted brands, factories, debts and liabilities the government deemed commercially unnecessary.
Barring a successful last-ditch appeal by creditors to block the sale, the U.S. Treasury Department -- through its Vehicle Acquisition Holdings LLC -- would be able to close on the deal after noon on Thursday. GM and the Treasury Department had asked Gerber to make his ruling effective immediately, allowing the sale of GM's assets to close as early as today, but under Gerber's order, GM and the Treasury Department aren't authorized to close the deal until after noon on Thursday, giving objectors a chance to file an appeal and win a court stay. But Gerber warned objectors that the government might not wait that long.
Gerber rejected objections filed by key creditors, including consumer and asbestos victims as well as retirees from three unions: the International Union of Electricians, the Steelworkers, and the Operating Engineers. The judge ruled that liability claims pending before GM filed for bankruptcy can be classified as bad assets and left behind in bankruptcy. More at Detroit News