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General Motors gets green light for its bankruptcy sale
06.07.09
General Motors' bankruptcy sale was given the go-ahead by a US judge last night allowing the government to take over its most profitable parts.
Judge Robert Gerber of the US bankruptcy court in Manhattan said the sale would “prevent the death of the patient on the operating table”.
GM filed for bankruptcy protection on 1 June and had argued that it would be forced to go into liquidation if the sale was not approved.
The US government said it could walk away from funding the carmaker if a deal was not approved by 10 July. “If GM liquidates, there will not only be nothing for stockholders, there will be nothing for unsecured creditors,” Gerber said.
The Obama administration plans to take on the best parts of GM including the Chevrolet and Cadillac brands with a much smaller workforce and smaller network of dealers.
It said that it could float the business on the stock market as early as next year.
The US Treasury is injecting $60 billion (£37 billion) into “new GM” including $50 billion which will give the taxpayer a 60% stake in the business.
