• Jul 6th 2009 at 2:07AM
  • 27
General Motors has cleared a major hurdle to get out of bankruptcy quickly, as U.S. Judge Robert Gerbe has finally given the automaker the go-ahead to sell off its best assets to a newly formed company that analysts have been calling "New GM". The new GM will include assets like the Chevrolet and Cadillac brands, plus plants and production facilities that haven't scheduled for closure. The old GM will consist of soon-to-be shuttered plants, the Pontiac brand and mountains of debt and liabilities.

Judge Gerbe gave the go-ahead on Sunday because he felt not doing so would cause "immediate and irreparable harm" to the 100-year-old company. The Detroit Free Press is reporting that the Treasury Department was threatening to cut off funding to GM if the sale didn't go through by July 10. Hundreds of GM's debtors requested that the sale be rejected, but Judge Gerbe's ruling likely means that the affected parties won't see much, if any money owed.

GM entered Chapter 11 bankruptcy protection on June 1, and if New GM actually does emerge from bankruptcy this week, the fourth largest bankruptcy in this country's history will have been completed inside of just six weeks. The timeframe is very similar to that of the much smaller Chrysler, which needed only 42 days to exit bankruptcy.

[Source: Detroit Free Press, Photo by Hiroko Masuike/Getty]

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    • 1 Second Ago
      • 6 Years Ago
      Good news, indeed.

      Hopefully the sale won't be held up by the lone dissenting bondholder like in Chrysler's case. Anyone who bought these bonds knew they were a risky investment.

      Now let's get the new GM going. It's time to rebuild this once great company.
      • 6 Years Ago
      The good for the many out weigh the good for the few.
      To bad people will loose out but greed got us here in the first place.
      He all have been blessed to be born in countrys with a good standard of living.
      Lets hope the big three turn around for the good of not only USA but all of North America, Canada and Mexico included.
      Our Industry and economic wealth resonates through out our global region.
      So if you say "I just bought my last GM", ok just make if a Ford or Chrysler next time.
      As a tax payer having to lend this money out or give it out sucks!
      Loosing the last of many industies that devoloped this wealth sucks more.
      I hope GM will survive choice is good and GM will remain high on my list.

      I do love the fact that Ford is standing on its own two feet and vows to build the best vehicles in the industry.

      Ford is #1 on my list just that my local dealer really blows.
      Chrysler has the best dealers in MI`s EUP. Because there`s more than one.
      • 6 Years Ago
      Loving that photo...
      • 6 Years Ago
      I just don't think this was handled all that well. It'll be advantageous for GM, but everyone else (including the taxpayer) takes a huge soaking.

      I'm no expert at bankruptcy, but I find it hard to believe it had to be this way.
        • 6 Years Ago
        I know bankruptcy means the creditors are going to have to give something up, but the idea is they get something back, and the owners of the company get something back too. In other words, chapter 11 is supposed to leave the creditors in a better position than chapter 7 does, or else your creditors would just force you straight to chapter 7.

        In this case, it seems like so many people are getting wiped out. The common stockholders for example end up with nothing at all. GM has a lot of assets still. Their main problem was that they were marginally profitable at best in good times and so in bad times (like now), they are quite unprofitable. So why in this deal do so many get left holding the bag? The entire "old GM" is going to go immediately into receivership, we know that. And unless the economy turns around, the "new GM" probably will too!

        I dunno, maybe I failed to understand how far behind the 8-ball GM was. I showed that several times on here with my comments about cash flow, but maybe I still don't understand how far off I was.
        • 6 Years Ago
        Bankruptcy screws many people out of what they are owed.

        Chapter 11 Bankruptcy requires funding. It costs money to execute a bankruptcy and have the company stay in tact. GM couldn't get money threw private methods or they wouldn't have gone to the government in the first place.

        So this went down just like bankruptcy would have. The only irregularities were 1) the degree to which the UAW retirees were protected and 2) the government ending up with stock instead of loan IOUs. And given who is president, it wasn't hard to predict to predict #1 or #2 for that matter.

        I believe Chapter 11 bankruptcy impacts were misrepresented to the public by many people. Even so far as some of the same people who advocated bankruptcy for the auto companies now beat them with fact they are in bankruptcy.
        • 6 Years Ago
        Mr. Oak...too early to ascribe magnitudes better to O'man's administration...O really, you think it's 10's to 100's of times better in less than 200 days?
        The dems overreached in 92 with Clinton's election...just watch them do it again...but thank god Gingrich won't be the one to save the GOP.
        The problem with the O administration is that our greatgrandchildren will be paying a national debt that is orders øf magnitude greater than GWB ever had. And that taxes will rise to probably 22-26% of GDP (up from current average 18% over last 40 years) to finance the socialist state we will have become.
        • 6 Years Ago
        The public wanted General Motors to go into bankruptcy, they got it.

        After months of people telling them that it wasn't going to be pretty, I have to shake my head in disgust when they complain about it now.

        I can only imagine what would've happened if no public aid was offered at all; I mean, you think this recession's bad now...
        • 6 Years Ago
        Wasn't one of the nicknames for bankruptcy... "welfare program" for the rich. No doubt, the whole system is screwed.
      • 6 Years Ago
      He does look rather happy.
      • 6 Years Ago
      What they try to do is to make small cars.

      I mean realllyyy??? Small cars , eco baxes???

      No one and I mean no one can make a better small car then a Japanese car makers ( yeah Koreans are close and China is getting better each year ). Remember that's how the started in USA by making small cars. There is no way in Hell GM can beat Toyota or a Honda in their own game especially with unions making them.

      Yeah the Obama will send them a billion each year on too big 2 fail mandate but still the quality won't be there even with the subsidies.

      See what the kids are driving these days and you see the future of GM.

      - this is one of the best quotes that I have seen in a while from TOOL:

      I just hope that you don't have any money in stocks or in 401K since then say thought process can be applied.

        • 6 Years Ago
        Seriously no one, hmmmm...not even the Germans, Italians and French. I could name at least 5 cars from those countries that would beat any offerings from Japan, Korea or China.
        • 6 Years Ago
        the quote was
        Anyone who bought these bonds knew they were a risky investment.
      • 6 Years Ago
      Joe does bring up a point. Holden and Daewoo aren't in tip-top shape. I do think GM ought to keep Holdie though. They rather need it for the market Down Under. Daewoo could go though. GMC's non-commercial business should be shown the door as well. Vauxhall really isn't necessary either.

      The way I see it, Chevrolet should be the primary GM world brand. Holden would be an exception. From there, Cadillac would be the premier GM brand, competing with the finest. Buick would be mostly a N/S American and Asian venture, splitting the performance and luxury of Cadillac and the more affordable and less brassy styling at Chevy. That's what Buick did so well before, and it's what they should be doing now, especially with the 300C and Genesis prowling the market.

      The important thing for GM to remember is to make sure you have world class products or you'll meet the very same fate pretty quickly.
      • 6 Years Ago
      " believe Chapter 11 bankruptcy impacts were misrepresented to the public by many people. Even so far as some of the same people who advocated bankruptcy for the auto companies now beat them with fact they are in bankruptcy. "

      You're damned if you do and damned if you don't.

      -A lot of lawsuits were frivolous exagerated and simply were serving lawers interests. They will have to fight in the old GM for the next 20 years.

      -Asbestos lawsuits are (were now) killing the big three. Again, the award are now going to the grandsons of the alleged victims. A suggestion to create a fund was given by Wagoner to GWB and was simply ignored.

      - In USA you win a lawsuit against McDonald for coffee which is too warm. Imagine against car companies.

      The general public forgets fast. Customers buy products because of good value, not because it is funded by US treasury dept. Ford, which is the darling of Detroit at the moment will be at a net disadvantge. They cannot escape the lawsuits of so many customers when they had this tire problems. They are also crippled with a huge debt, Visteon bankruptcy: does this sound familiar?

      • 6 Years Ago
      As i said before one way GM can survive if it closes HQ in Detroit and relocates to Shanghai and move its manufacturing line from NA to China.
      • 6 Years Ago
      Hopefully in a few years GM will be profitable again.
      • 6 Years Ago
      Everything with the bankruptcy was rushed. A corporation the size of GM would normally need over a year or more to reorganize. There are some $25 million corporations that have been in bankruptcy for 5 years. To get a bankruptcy the size of GM done in a month is a farce.

      The good GM will be owned by the government with no liabilities and all of the good assets. The bad GM will be in court for the next decade liquidating to satisfy the bondholders that got screwed.

      Make no mistake Obama threw out every bankruptcy rule in the book to turn "Government Motors" into a reality. Nobody in their right mind should buy a new GM car. They may look the same and a lot of the workers will still be the same but the GM of the past 100 years is officially gone. The real GM is the "bad" GM that will be liquidated. You have a new Board of Directors with a US government majority control.

      If Hitler bought Ford but kept the name and the factories, would it still be the same Ford? Would Americans still buy Fords even if the real company was Hitler Motors? If you buy a car from the new GM you are doing just that. Buying a Socialist motorcar.

      The American Flag may look the same as it always has this past July 4th but it stands for something completely different now.
        • 6 Years Ago
        GM's bankruptcy and rebirth sound like a page out of Obama capaign: "new, new, new; change, change, change". What is new and what has changed?

        These are the questions that are not allowed to be asked, and which I believe no one has the answers to, ESPECIALLY GM.
      • 6 Years Ago
      I think I'll sell all my old debt to the "new David". What a brilliant ... SCAM.

      I'm not responsible for anything. That was the OLD David. You're talking to the NEW David.

      What? What do you mean the Old David looks EXACTLY like the New David? Who told you!!??
        • 6 Years Ago
        Scam? It's called bankruptcy. Millions of people around the country do it every month. Sometimes they loose everything and sometimes they can keep home and cars if they are able to continue to make payments. Not much different with GM's bankruptcy just much more money involved.
        • 6 Years Ago
        Yes, and my point being as well that the "New GM" is not very different than the "Old GM", and even GM itself seems to have no very clear idea/road map for this amorphous entity and how it will redefine itself.

        Stamping "it's new!" on the same-old, same-old doesn't work anymore.

        What amazes me is that they managed to convince anyone that they know how to change, and what change entails. I have yet to hear it from them. At least Chrysler has the Fiat road map. That is tangible and different. The "Cruze" will fix GM how, exactly? All I see is more Cavalier/Cobalt when I look at it.
        • 6 Years Ago
        @ SK, I think the difference is that if you go bankrupt, you won't be hable to "sell" your valuables to the "new you" (house, car, full salary) and let the rest die (dept, liabilities). You'll have to liquidate everything at once and start as new (sell everything, pay what you can, get rid of the rest and start over).

        • 6 Years Ago
        Of course it's a scam. Try not paying your mortgage, car payments etc for a few months, then delcare bankruptcy. With the exception of your house in some states, you would have to liquidat and/or give back any assets with liens on them (your car, anything put up as security for a loan). New GM gets to walk away with all the good assets (which cannot all be lien-free). It's liek you buying a BMW, then declaring bankruptcy, and the new you keeps the BMW, and the old you get the loan for the car and the broken down banana yellow Datsun 210 you had in the backyard.
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