GM awaits judge’s ruling on sale plan
Decision could come over this weekend
NEW YORK — General Motors Corp. may have to wait out the long holiday weekend to learn if its bankruptcy plan is moving forward, after U. S. Judge Robert Gerber adjourned a three-day hearing without indicating when he will rule on GM’s plan to sell its good assets to a new company.
Gerber asked GM’s attorneys to submit a proposed order that would be entered if the sale were to be approved. They said they would do so by Friday night or today. Gerber is expected to rule some time after that.
GM’s government-backed plan for a quick exit from Chapter 11 protection hinges on the sale of most of its assets to a new entity, allowing the automaker to leave behind many of the costs and liabilities that have made it unprofitable. The Detroit car maker’s June 1 filing for bankruptcy protection was the fourth-largest in U. S. history.
A lawyer for GM warned the court that the only alternative to GM’s plan would be a liquidation of the company’s assets that would have “horrific” consequences for everyone involved.
Attorney Harvey Miller said the government is committed to cutting off funding to GM if the sale is not approved by July 10.
“Essentially the objectors are asking you to play Russian roulette,” Miller told Gerber, adding that ignoring the deadline puts the futures of GM’s employees, retirees, and creditors all at risk.
But on Thursday, Michael Richman, an attorney for a trio of bondholders opposed to GM’s plan, told Gerber to “call the government’s bluff” and require GM to restructure itself under Chapter 11 instead of approving the quick sale of its assets. This would allow the bondholders to negotiate for more in exchange for the debt they hold, he said.
Hundreds of parties, including bondholders, unions, state officials, consumer groups and individuals, have filed objections to the sale, threatening to hold up the process.
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