GM gets the green light on its section 363 bankruptcy
Judge Robert Gerber has given General Motors approval to sell its assets under section 363 of the bankruptcy code. Last month I indicated that this 363 sale was more questionable than Chrysler’s and could meet more resistance in court. That has not happened and the GM bankruptcy looks likely to proceed according to the Obama Administration’s plans.
I said “The Obama people are going to argue that GM is dependent on government monies to exist and that it cannot ‘survive the full plan process.’” The judge agreed with this reasoning as evidenced by the quote from the FT article below.
Regardless of what you think about other aspects of Obama’s handling of economic issues, the general success of the Chrysler and GM bankruptcies will give Obama a lot of credibility on the economic front just when he needs it.
A US judge on Sunday approved General Motors Corp’s bankruptcy sale, in a move that will allow the company’s most profitable assets to exit bankruptcy protection under government ownership.
Judge Robert Gerber of the US bankruptcy court in Manhattan said the sale would ”prevent the death of the patient on the operating table.”
GM, which filed for bankruptcy protection on June 1, had argued that it would be forced to liquidate if the sale was not approved. The US government said it could walk away from funding the automaker if a deal was not approved by July 10.
”If GM liquidates, there will not only be nothing for stockholders; there will be nothing for unsecured creditors,” Judge Gerber said in a 95-page opinion.