Old GM, Meet the New GM
It's been a while since I posted anything on the GM bankruptcy, and the hiatus has been completely deliberate. With so much news and speculation swirling around the proceedings, it would be easy to let the affair completely take the blog over.
But yesterday's opinion
from the bankruptcy court judge definitely deserves a post, especially since one of the key points in the opinion deals with the disposition of injury lawsuits against the company.
The judge's ruling allowed GM to sell its best assets to a new company
owned primarily by the US Treasury. This company would then move
forward out of bankruptcy, while the old GM stays in bankruptcy, wraps
up its affairs and settles claims against it.
Under Judge Robert
Gerber's opinion, those claims would include personal injury lawsuits
that were filed before GM entered bankruptcy protection, as well as
consumer complaints and claims by bondholders.
are upset that their claims are relegated to the old GM under the plan
since there is less of a chance that they will receive their desired
compensation. One group of accident plaintiffs has already appealed
While Judge Gerber seemed to appreciate the groups'
concerns, he wrote that "the only alternative to an immediate sale is
liquidation - a disastrous
result for GM's creditors, its employees, the suppliers who depend on
GM for their own existence, and the communities in which GM operates."See Also:
Bankruptcy judge OKs GM sale plan (AP
Court Ruling Clears Path for G.M. to Restructure (NYTimes
GM Asset Sale Gets Judge's Nod (Wall Street Journal