GM Cleared to Sell Assets to New Company

General Motors may finally find itself emerging from bankruptcy after reports stated that a bankruptcy judge has approved the sale of its bulk assets to the new company. But while that may seem good news, controversies are still in the air, particularly the debts and liabilities that GM had incurred which forced it to shut down.

U.S. Judge Robert Gerber said in his 95-page ruling that the sale was in the best interests of both GM and its creditors, whom he said would otherwise get nothing.

GM will leave bankruptcy court with significantly reduced debt and labor costs, as well as fewer dealerships and brands. But it’s still operating in an environment where fewer American are buying cars. That means that people injured by a defective GM product in connection with an incident that occurred before June 1 would have to seek compensation from the “old GM,” the collection of assets leftover from the sale, where they would be less likely to receive compensation.

GM’s government-backed plan for a quick exit from Chapter 11 hinges on the sale, which will allow the automaker to leave behind many of its costs and liabilities. The Treasury Department has vowed to cut off funding to GM if the sale doesn’t go through by July 10.

After one good news follows another issue for dispute. Depending on how you look at it, it all makes sense. But one thing that is for sure, the more bickering involved the harder it is to resolve the issues. Then again, no one wants to be left out in the cold with nothing to hold.

(Source) Press

Tags: assets, automaker, bankruptcy court, bankruptcy judge, buying cars, Chapter 11, controversies, creditors, debts, General Motors, GM, gm product, hinges, judge robert, liabilities, one thing, quick exit, robert gerber, treasury department