Business

Bankruptcy judge OKs GM sale plan

A bankruptcy judge has ruled that General Motors Corp. 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 95-page ruling late Sunday that the sale was in the best interests of both GM and its creditors, whom he said would otherwise get nothing.

"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.

An appeal is expected. 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. The deadline to appeal is noon Thursday, after which point Gerber's order takes effect and the sale is free to close.

Attorneys for some of GM's bondholders, unions, consumer groups and individuals with lawsuits against the company have said their needs have been pushed aside in favor of the interests of GM and the government.

GM's government-backed plan for a quick exit from Chapter 11 hinges on the sale, which will allow the automaker to leave behind many of its costs and liabilities. The Treasury Department has vowed to cut off funding to GM if the sale doesn't go through by July 10.

Steve Rattner, a top aide to Treasury Secretary Timothy Geithner and the head of the Obama administration's auto task force, said the government was "confident that his decision will stand and the sale of GM's assets to new GM will proceed expeditiously."

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.

"Now it's our responsibility to fix this business and place the company on a clear path to success without delay," GM Chief Executive Officer Fritz Henderson said in a statement early Monday.

  Comments