GM’s Sale Plans get OK from bankruptcy judge

by Bradley Wint on July 6th, 2009 at 3:14 am

General Motors has narrowly escaped bankruptcy after a judge ruled in their favour, allowing them to sell a major chunk of their good assets to a new company (the possible future of GM) and leaving behind the old company with the bad stuff like tons of liability and debt. The new firm will comprise of more formidable names like Chevrolet and Cadillac, while the old GM will hold on to brands like Pontiac.

This came after government officials gave them an ultimatum to sell assets by the 10th of July, or face not receiving anymore state support. Even though many parties felt that sale should not have gone through (to obviously try and regain their lost assets), Judge Robert Gerber felt that it would be an unfavourable idea and allowing them to sell assets would avoid “immediate and irreparable harm” to the 100 year old company. He believes that in the long run, it would work out better for the creditors and the automaker. This means though that parties who invested won’t see any of their monies being returned any time soon.

GM files for bankruptcy protection on June 1st, after very poor sales resulted in low profits and tight cash flows.

Via: Detroit Free Press | Image: NBC24 Toledo

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