A plan to sell assets of General Motors Corp. was approved late Sunday by a federal judge. The sale is an important step for the auto giant and could stave off liquidation.
Three days worth of hearings and more than 800 objections later and U.S. automobile maker General Motors has an asset sale order in place.
Bondholders had been
holding out in hopes of getting more of a stake in the fledgling company, but Robert E. Gerber of the Federal Bankruptcy Court in Manhattan said today that an asset sale was necessary for the survival of G.M., and that liquidation was the only other option.
The sale could be closed as early as Monday or Tuesday. G.M. is facing a Friday deadline. If no deal is finalized by then, the company will lose as much as $30 billion in financing from the U.S. government.
The deal will allow G.M. to sell brands like Chevrolet and Cadillac to a new company owned by the federal government and the United Autoworkers Union. This company, called the new G.M., will emerge from bankruptcy and likely be taken public by the government next year,
according to the New York Times.
The old G.M. would remain in bankruptcy and be given $1.175 billion in financing while it continues through the closeout process. The full asset sale ruling can be read
here.
