Bankruptcy judge OKs GM sale plan
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AP
Oluşturulma Tarihi: Temmuz 07, 2009 00:00
NEW YORK - A bankruptcy judge said General Motors can sell the bulk of its assets to a new company, clearing the way for the automaker to quickly emerge from bankruptcy protection.
Federal Judge Robert Gerber ruled late Sunday that the sale is needed to avoid "immediate and irreparable harm" to GM and is in the best interests of both the automaker and its creditors.
The decision came after a three-day hearing that wrapped up Thursday, during which GM and government officials urged a quick approval of the sale, saying it was needed to keep the automaker from selling itself off piece by piece.
But attorneys for some of GM's bondholders, consumer groups and individuals with lawsuits against the company argued for its rejection, saying that their needs were being pushed aside in favor of the interests of GM and the government.
It was unclear early Monday if any of those groups planed to appeal Gerber's decision. Last month, a group of bondholders and others took their objections to Chrysler's sale plan all the way to the Supreme Court, delaying the automaker's exit from bankruptcy protection.
GM's government-backed plan for a quick exit from Chapter 11 hinges on the sale, which will allow the automaker to leave behind many of its costs and liabilities. The Treasury Department has vowed to cut off funding to GM if the sale doesn't go through by July 10.
Fourth-largest bankruptcy
The Detroit carmaker's Chapter 11 filing on June 1 was the fourth-largest in U.S. history.
GM will leave bankruptcy court with significantly reduced debt and labor costs, as well as fewer dealerships and brands. But it's still operating in an environment where fewer American are buying cars. At the current pace, automakers will sell around 9.7 million vehicles this year. That's a huge reduction from sales of more than 16 million vehicles as recently as 2007.
In June, the automaker captured 20.3 percent of the U.S. market. GM has estimated that it can maintain a market share between 15 and 17 percent, reflecting its plan to sell off three brands and end its Pontiac line.
The decision came after a three-day hearing that wrapped up Thursday, during which GM and government officials urged a quick approval of the sale, saying it was needed to keep the automaker from selling itself off piece by piece.
But attorneys for some of GM's bondholders, consumer groups and individuals with lawsuits against the company argued for its rejection, saying that their needs were being pushed aside in favor of the interests of GM and the government.
It was unclear early Monday if any of those groups planed to appeal Gerber's decision. Last month, a group of bondholders and others took their objections to Chrysler's sale plan all the way to the Supreme Court, delaying the automaker's exit from bankruptcy protection.
GM's government-backed plan for a quick exit from Chapter 11 hinges on the sale, which will allow the automaker to leave behind many of its costs and liabilities. The Treasury Department has vowed to cut off funding to GM if the sale doesn't go through by July 10.
Fourth-largest bankruptcy
The Detroit carmaker's Chapter 11 filing on June 1 was the fourth-largest in U.S. history.
GM will leave bankruptcy court with significantly reduced debt and labor costs, as well as fewer dealerships and brands. But it's still operating in an environment where fewer American are buying cars. At the current pace, automakers will sell around 9.7 million vehicles this year. That's a huge reduction from sales of more than 16 million vehicles as recently as 2007.
In June, the automaker captured 20.3 percent of the U.S. market. GM has estimated that it can maintain a market share between 15 and 17 percent, reflecting its plan to sell off three brands and end its Pontiac line.