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D-day for 'New GM'
30 June 2009
GM is heading to the bankruptcy court in the US today to attempt to sell its assets to a 'new GM' company funded by the US government.
The ailing American giant entered Chapter 11 bankruptcy protection on 1 June and its court appearance today would allow it to keep its best assets, such as Cadillac and Chevrolet, while also receiving billions of investment from the Obama administration.
The assets not taken by new GM will be liquidated by the bankruptcy court.
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GM bondholders and dealers have criticised the plans, but no other offer for GM has emerged. The Obama government will invest $50 billion (£30 billion) into New GM in return for a 60 per cent stake.
GM has said in court documents that the sale would avoid a “systemic failure” for the US auto industry and the creation of new GM was “a genuine opportunity for the business to survive and thrive in an economically viable entity.”
Many objections have been filed against GM’s plans but with many already resolved or withdrawn, the remaining objectors face an uphill struggle to stop the deal going through.
GM’s hearing is in the same court that recently passed Chrysler’s merger with Fiat.
Mark Tisshaw
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