REPORT: Federal bankruptcy court expected to rule on "New GM"
According to Reuters, General Motors is on its way into bankruptcy court today in an effort to win approval and access to additional federal funding under its asset-split plan. The automaker filed for Chapter 11 protection just 30 days ago, but it will now go before Judge Robert Gerber to sell desirable assets (think: Chevrolet, Cadillac, GMC, Buick) to "New GM" and jettison various debts and negative assets by consigning them to "Old GM," which would be liquidated. If it succeeds in winning court approval, GM will receive billions in U.S. Treasury funding.
Before it can open the Fed's piggy bank, however, GM must weather challenges from bondholders and disgruntled consumers involved in certain types of product liability lawsuits. Industry watchdogs believe that both GM and the Obama administrations auto task force have learned from Chrysler's bankruptcy machinations, which could accelerate the process. For more details on today's proceedings, check out the link below. Thanks for the tip, Michael!
[Source: Reuters via Yahoo | Image: Michael Heiman/Getty]
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Reader Comments (Page 1 of 1)
Avinash machado 11:03AM (6/30/2009)
If it succeeds in winning court approval, GM will receive billions in U.S. Treasury funding.
So the billions so far were not enough?
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ronEbear 11:21AM (6/30/2009)
And the entire argument was that millions would have lost their jobs if GM was allowed to fail. How many jobs have been lost anyways? I hope this plan backfires.
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alex 11:38AM (6/30/2009)
yes, let's all hope this fails! that way even more people lose their jobs and all the public money goes down the drain. Sounds like a win, win!
Cougs 11:46AM (6/30/2009)
The money already is lost - there is no way that GM will be able to get their stock value to a level (it would have to be a higher per stock value than they had at their highest point in the company's history) that will allow them to return the full amount loaned by having the Government sell off stock.
ronEbear 11:46AM (6/30/2009)
Yes I do hope that billions are lost. Someone needs to actually LEARN A LESSON in capitalism and free markets. What`s happening with these "bankruptcies" is protectionism and a hint of socialism. America no longer represents the ideals it presents.
alex 12:23PM (6/30/2009)
@cougs
so if we can't get it all back, we should hope to get none back?
John 12:35PM (6/30/2009)
Yes alex, we should hope it fails and all the jobs and money are lost forever. Then maybe we will get off our collective asses and stop Obama from killing Ford and Caterpillar and IBM and anyboby else they set their sites on in order to destroy the US economy.
Anybody that still thinks this is just about GM and Chrysler failures are total morons.
Get off your ass and learn what is really going on.
jpm100 12:39PM (6/30/2009)
This thread branch is a perfect testament to the fact people over time not only begin to confuse the means with the ends but turn the means into blind dogmatic principles. And pray that the ends be a tool of divine judgment on the unfaithful.
BrianFL 2:59PM (6/30/2009)
hey great plan!! Why would you hope something as big as this fails just to prove some type of point to get your politcal Ideas across? Your selfishness shows. Peoples lively hoods are other jobs are all at stake here.
John 5:44PM (6/30/2009)
Other people's livelihoods are not my problem, unless I freely choose to make them so. Would you agree to have some one put a gun to my head and take money out of my wallet so someone else has a "job" (such a job that it would be)? No, of course not, that would be unfair. But that's exactly what is being done to me, my children, and grandchildren (who will ultimately be paying this bill 40-50 years from now) by a government that forces me to pay taxes, then uses it to prop up this or that company and benefit their campaign contributors.
It's not blind dogma, it's real life. Companies go out of business all the time, new companies start up. People lose jobs, people find new jobs. I owe nothing to my fellow man other than what I choose to give, and him to me. Call it selfish if you wish, but I believe it to be more selfish to take other people's money, without their consent, and spend it on another person to make that person or the "giver" feel better.
Had we not blown through billions of dollars and let those two companies stand on their own, they might have made it, or might not have. If they failed, people would have to find other work, and the assets would go to more productive uses (there are already companies interested in various idle plants the two have, Penske picked up Saturn, and Mahindra is looking to snap up defunct Chrysler dealers). Yes it will be hard on some people, but that's life. If I lose my job (which I have before), I won't go crying to some government bureaucrat to "save" my job, or take a dime of public assistance. I'll get up off my butt and find another job. I used to work in IT with a guy that ran a backhoe the first 20 years of his life, then broke his back and couldn't work contruction any more. He went back to school and became a pretty well paid UNIX sysadmin, so I know it can be done.
Of course, letting the market work the way it's supposed to wouldn't allow the administration to social engineer the car industry the way they want (if the really wanted to help, would they ahve granted CA's emissions waiver?).
“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.”
~ James Madison
Redeemed 11:30AM (6/30/2009)
I hope these bond holders don't cave in like during the Chrysler case and fight them all the way to the Supreme Court.
With Chrysler, the bankruptcy laws were thrown by the wayside and the bondholders got ripped off over preferential treatment for the UAW. This is cronyism by Obama at its worst and it's outrageous.
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Willie 12:23PM (6/30/2009)
Wow things are really screwed up at GM and Chrysler. Being that I live in Michigan I don't want either company to fail because I already see the effects of massive job loss (I'm so thankful my job is recession proof), but the people who ran these companies into the ground deserves to be lock up. I'm just glad Ford is doing their restructuring all own their own. Even if down the line Ford needs a little money from Uncle Sam I want oppose because they're at such a disadvantage.
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Bats 4:18PM (6/30/2009)
What is the purpose of keeping GMC around? How many versions of a truck do you need? Why not just take the best features of the brand and use them in Chevy and Buick? This would give Chevy trucks a upscale trim, and give Buick some decent crossovers with less competition in the segment. In turn saving on the manufacturing side thru less complexity.
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