Late Sunday, federal bankruptcy court judge Robert E. Gerber approved General Motors’ plan to sell its good assets to a new, government-backed company, the New York Times reports.
The assets sale was necessary for GM to come out of bankruptcy. Without the sale, GM would have had to liquidate by July 10. Judge Gerber heard 850 objections over three days of hearings before approving the sale.
“Bankruptcy courts have the power to authorize sales of assets at a time when there still is value to preserve — to prevent the death of the patient on the operating table,” Judge Gerber wrote.
GM could be out of bankruptcy as soon as Friday and is expected to keep its company name. Under the new deal, GM would sell its best assets, including Chevrolet and Cadillac, to a new company owned mostly by the American and Canadian governments and a UAW health care trust. The Obama administration anticipates taking the company public next year.
Old GM will stay in bankruptcy and the Obama administration has agreed to lend it $1.175 billion to wind down the estate and settle claims. Through GM’s bankruptcy process, another 21,000 union workers have lost their jobs and 12 to 20 factories and 40 percent of the 6,000 dealers will close.