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Monday, July 06, 2009

GM Bankruptcy Plan Approved

by Calculated Risk on 7/06/2009 09:03:00 AM

From the NY Times: Court Ruling Clears Path for G.M. to Restructure

A federal judge approved a plan by General Motors late on Sunday to sell its best assets to a new, government-backed company ...

In his 95-page opinion, Judge Gerber wrote that he agreed with G.M.’s main contention: that the asset sale was needed to preserve its business in the face of steep losses and government financing that is scheduled to run out by the end of the week.

“Bankruptcy courts have the power to authorize sales of assets at a time when there still is value to preserve — to prevent the death of the patient on the operating table,” Judge Gerber wrote.
Other groups, including those representing product liability claims and asbestos litigants, ... fought against G.M.’s plan. Under the terms of the sale, most of those claims would remain with the remnants of G.M. in bankruptcy, meaning they were likely to recover little, if anything.
The ruling is being appealed.

This was quick - GM filed for bankruptcy on June 1st.