Judge Gerber approves GM asset sale

Saying it would “prevent the death of the patient on the operating table,” Judge Robert Gerber of the U.S bankruptcy court in Manhattan approved the 363 sale of key General Motors assets to NGMCO, Inc., allowing a new, smaller, and government-owned GM to exit Chapter 11, just days ahead of an Administration-imposed deadline. Gerber also issued a four-day stay of the order approving the sale to allow for appeals. While such actions are common, a ten day stay is more typical, but that would have pushed the effective date beyond the July 10 funding cutoff date. Under Gerber’s timeline, the sale could close as early as Thursday.

Reuters reported that Judge Gerber overruled objections from creditors, consumer groups and terminated GM dealers, saying the timely sale was the only alternative to liquidation. In his 95-page opinion, Gerber wrote, “If GM liquidates, there will not only be nothing for stockholders; there will be nothing for unsecured creditors.”

The “New GM” will exit bankruptcy with $60 billion in financing and just four brands: Buick, Cadillac, Chevrolet and GMC. Hummer, Saab and Saturn, which will likely be sold, and Pontiac, which will simply disappear, the new General Motors will also leave behind billions of dollars in debt along with unwanted facilities and assets that will be auctioned off in the Chapter 11 proceedings to satisfy the claims of bondholders and creditors. In keep with its station, the “Old GM” will change its name to “Motors Liquidation Company.”

The new General Motors will also leave behind decades as the world’s largest automaker and the No. 1 automaker in the United States. Industry experts expect the new, slimmed-down GM will jockey for position with Ford and Toyota.