REPORT: Federal bankruptcy court expected to rule on "New GM"

Chris Paukert — Tue, 30 Jun 2009 10:57:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

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]

REPORT: Federal bankruptcy court expected to rule on "New GM" originally appeared on Autoblog on Tue, 30 Jun 2009 10:57:00 EST. Please see our terms for use of feeds.

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New GM will take on future product liability claims, but not the current ones, against Old GM

Jonathon Ramsey — Sun, 28 Jun 2009 14:11:00 EST

Filed under: Government/Legal, GM

A consumer group representing people who currently have product liability claims against GM and Chrysler looks like it won't be getting much, if any, restitution. When GM went into bankruptcy, it still planned to deny any liability claims -- ones that came up today, for instance -- when the new GM was formed. In a reversal meant to quell resistance from that consumer groups and state officials, New GM has agreed to assume liability for future claims on products made by Old GM.

The consumer group said, "The fact that 'New GM' will protect consumers injured by defective 'Old GM' cars is a positive development for public safety." The key word in this is "future;" new GM won't be responsible for any of the currently pending claims -- those that the consumer group is really fighting over, and that will still be addressed by old GM. Also, no date was given for when the "future" begins, so there is still a fair bit of clarity left to get on this issue.

[Source: Yahoo!]

New GM will take on future product liability claims, but not the current ones, against Old GM originally appeared on Autoblog on Sun, 28 Jun 2009 14:11:00 EST. Please see our terms for use of feeds.

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