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Deal on new GM could close this week

Posted Tuesday, Jul 7, 2009, 10:35 am in Employee News

General Motors Corp. expects its good parts to emerge as a new company shortly after opponents exhaust their appeals process later this week, the Detroit Free Press reported.

The Detroit automaker received a judge’s approval late Sunday to spin off its good assets to create New GM, a company whose largest owner will be the U.S. government, the paper said. U.S. Bankruptcy Judge Robert Gerber said the sale was “necessary to avoid immediate and irreparable harm” to GM—a but in order to give time for parties to object, his order does not take effect until noon Thursday, the Free Press said.

Steve Jakubowski, a Chicago lawyer for five individual accident victims, quickly filed a notice Monday to challenge the decision, but said in an interview that he would not seek a stay to block the deal, the paper said. It would be the objectors’ responsibility to prove that the sale should be put on hold for further consideration, the story said. (Detroit Free Press)
 

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GM bondholders won’t appeal bankruptcy

GM bondholders won’t appeal bankruptcy

Posted Tuesday, Jul 7, 2009, 10:33 am in Employee News

A group of bondholders who objected to General Motors Corp.’s asset sale said it does not expect to appeal a federal judge’s ruling that clears the automaker’s swift emergence from Chapter 11 bankruptcy, The Detroit News reported.

The unofficial committee of family and dissident bondholders met Monday and decided it did not have enough money to fight the decision Sunday by U.S. Bankruptcy Judge Robert Gerber, the paper said. “Committee members today simply lack the resources needed to mount an effective appeals process on the accelerated basis that would be required here,” committee chairman Hal John said in a statement. “The entirely new and expensive level of commitment that would be needed is regrettably beyond our means.”

The committee’s lawyer, Michael Richman, urged Gerber in court to reject the asset sale, saying GM could still restructure in an accelerated, traditional Chapter 11 case, the paper said. The committee, which is comprised of three members who own GM bonds worth about $2.3 million, could still try and raise money to mount a legal challenge. They had objected to a deal reached with GM’s largest institutional bondholders to swap debt for 10 percent of the equity in a new GM and warrants to acquire another 15 percent, the story said. (The Detroit News)
 

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White House says it won’t ‘micromanage’ GM

White House says it won’t ‘micromanage’ GM

Posted Tuesday, Jul 7, 2009, 10:31 am in Employee News

The White House today praised the decision of a bankruptcy judge to approve the sale of General Motors Corp.’s good assets, saying it expects to GM to “expeditiously” exit bankruptcy in the coming days, The Detroit News reported.

Steve Rattner, a top advisor to President Barack Obama’s auto task force, said the administration would not “micromanage” GM, the paper said. The government will own a 60.8 percent stake in the company after the bulk of its assets are sold to a new entity backed by the Treasury Department, which is investing a total of $50 billion in GM, the News said.

Rattner also said GM could hold an initial public offering as early as the first half of next year, the paper said. IPOs “are difficult to execute when the (equity) market is not reasonably robust,” he said. Rattner said it would take several different sales, each taking six months, for the government to completely divest itself from its GM stake. He said the government wasn’t trying to squeeze out the last dollar of its investment, the story said. (The Detroit News)
 

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Judge sets up roadblock for opponents

Judge sets up roadblock for opponents of GM sale

Posted Wednesday, Jul 8, 2009, 11:06 am in Employee News

Attempts to fast-track appeals by opponents of General Motors Corp.’s sale to create a new GM ran into a roadblock late Tuesday, the Detroit Free Press reported.

In an evening hearing, bankruptcy Judge Robert Gerber rejected requests to bypass the U.S. District Court and let opponents make their case to the U.S. Court of Appeals, saying he would later issue a decision that laid out his thinking, the paper said. An additional request for a temporary halt of the deal also was rejected, the Free Press said.

The judge approved the sale of GM’s good assets to create a new GM late Sunday, but issued a stay until Thursday to give opponents time to object, the paper said. GM and the U.S. Treasury argued against fast-tracking the appeals and further blocking the deal, the story said. (Detroit Free Press)
 

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New GM Thursday?

New GM could make its debut on Thursday

Posted Wednesday, Jul 8, 2009, 11:07 am in Employee News

General Motors Corp. and the U.S. Treasury are prepared for the New GM to emerge from bankruptcy Thursday afternoon, the government’s lawyer told the court in a Tuesday filing, the Detroit Free Press reported.

“The parties are prepared to close immediately upon the expiration of the stay on Thursday afternoon,” Matthew Schwartz, an assistant U.S. attorney, said in court records. “Indeed, the parties have been prepared to close since earlier this week.”

The filing was made in response to motions from two groups opposing the sale of GM’s assets to create a new GM, the paper said. They are asking a judge to have their appeals bypass the U.S. District Court and go directly to the U.S. Court of Appeals, the Free Press said.

If that does not happen, one of the groups—the Ad Hoc Committee of Asbestos Personal Injury Claimants—has asked the court to temporarily halt the deal. Bankruptcy Judge Robert Gerber approved the sales deal late Sunday, but under his sales order, the deal closes Thursday in order to give objectors time to appeal, the story said. (Detroit Free Press)
 
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