A U.S. federal judge on Sunday approved the sale of General Motors Corp.'s assets to a new government-run company, clearing the way for GM to exit bankruptcy protection, according to media reports.
The decision by the judge, Robert E. Gerber of United States Bankruptcy Court in Manhattan, came after three days of hearings on the deal and 850 objections.
"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.
The ruling paves the way for GM's government-brokered restructuring. Under the terms of the revised deal, G.M. would sell its most desirable assets, including the Chevrolet and Cadillac brands, to a new company owned largely by the American and Canadian governments and a health care trust for the United Automobile Workers union.
G.M. and the government are seeking to close the sale by Thursday afternoon. The government had set a deadline of July 10 for the sale to be approved.
Judge Gerber's approval marks another victory for the Obama administration, which has sought to remake the U.S. auto industry in the wake of the financial crisis. Last month, a new Chrysler emerged from bankruptcy in just 42 days.
If the sale is consummated, G.M. would turn itself into smaller company with fewer brands and a new focus on fuel-efficient cars.
The U.S. flag flies at the Burt GM auto dealer in Denver June 1, 2009. A U.S. federal judge on Sunday approved the sale of General Motors Corp.'s assets to a new government-run company, clearing the way for GM to exit bankruptcy protection, according to media reports. (Xinhua/Reuters Photo)
Judge Gerber rejected pleas from dissident bondholders and product-liability claimants who objected to GM's plans.
Lawyers for several opponents argued during the hearings that the G.M. sale stripped them of their rights as creditors. A lawyer representing three dissident bondholders urged Judge Gerber to call what he said was the Obama administration’s bluff on the July 10 deadline.
The judge said the only alternative to GM's plans would be 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. In the event of a liquidation, creditors now trying to increase their incremental recoveries would get nothing."
Source:Xinhuanet
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