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Judge backs GM plan for Chapter 11 spending

Posted Friday, Jun 26, 2009, 11:09 am in Employee News

General Motors Corp. won approval Thursday to use up to $33.3 billion to pay for its bankruptcy, after making a few changes to settle technical objections, the Detroit Free Press reported.

The step marks another major milestone in GM’s dash through bankruptcy court, which it and Obama’s auto industry task force hope to complete with the creation of a new, government-owned GM by the end of the month, the paper said. The financing was approved by U.S. Bankruptcy Judge Robert Gerber in a matter of minutes after Harvey Miller, GM’s lead bankruptcy attorney, said the company had made some small changes to settle concerns of creditors and local governments. About $30.1 billion of the money comes from the U.S. Treasury, with the additional money coming from the Canadian government, the Free Press said.

The U.S. Treasury also added a clause that Gerber accepted stating it was legal for the government to pay for GM’s bankruptcy using money from the $700-billion financial industry bailout, the paper said. That had been a legal objection raised unsuccessfully by Chrysler LLC investors opposing its bankruptcy plan, the story said. (Detroit Free Press)
 
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