A bankruptcy judge has ruled GM can sell the bulk of its assets to a new company, potentially clearing the way for the automaker to quickly emerge from bankruptcy protection. U.S. Judge Robert Gerber said in his ruling that the sale was in the best interests of both GM and its creditors, whom he said otherwise would get nothing. But it appears the ruling will be appealed, reported The AP.
A Chicago law firm representing people who have sued GM in several auto accident cases filed paperwork Monday saying it would appeal to U.S. District Court in New York.
“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,” Gerber wrote in his ruling.
The ruling comes 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, unions, 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.
Lawyers for five “individual accident litigants” filed a notice of appeal with the bankruptcy court Monday morning that gave no grounds or details. The deadline to appeal is noon Thursday, after which point Gerber’s order takes effect and the sale is free to close.
Several consumer groups have objected to provisions in the sale that free the new company from liability for consumer claims related to incidents that occurred before GM went into bankruptcy protection.
Assets that GM does not sell to the new company will become part of the separate “old GM,” which the company said Monday will be known as Motors Liquidation Co., and will be sold to the highest bidder under court supervision, said the story.
The old GM will include a smattering of properties, several of which are facilities already slated to be closed. Other assets to be filed under the old GM include brands like Hummer, Saturn and Saab, for which GM has lined up buyers. They also include all current GM common stock, which — despite its active trading on over-the-counter markets — will soon be worthless.
The old GM will remain an entity until all of the facilities are sold off, a process that could take months or years to complete. The government has said it plans to provide about $1.18 billion to fund the wind-down process.