Judge approves "old" GM bankruptcy sale to "new" GM

Late yesterday, U.S. Bankruptcy Court Judge Robert Gerber approved the sale of General Motors to a new corporation, which will allow the company to come out of bankruptcy as early as Thursday.

The new company will be owned by:

• The United States government—a 60.8 percent stake
• A trust fund (VEBA) that provides medical benefits for United Auto Workers retirees—17.5 percent
• The governments of Canada and the province of Ontario—11.7 percent
• Bondholders of the old GM—10 percent.

Objectors, who included people ranging from consumer groups to bondholders, failed to present a viable alternative to the bankruptcy, the judge said. He allowed a four day stay of the sale until Thursday afternoon for appeals. Friday, July 10, is the last day the U.S. Department of the Treasury has agreed to extend any loans to the old GM.

The new GM will include Buick, Cadillac, Chevrolet, and GMC brands, with the automaker divesting itself of Hummer, Pontiac, Saab, and Saturn. It will also include some overseas operations, including those in China and Brazil. GM continues to work with potential buyers for its European operations.

The court-approved sale leaves behind hundreds of consumers who had personal-injury claims against GM for alleged defective products. (Read: "New GM" will cover future product-liability claims, but not pending ones.")

For most consumers, however, we expect the transition to the new company to be relatively transparent. The company has said it will still back warranties on all existing cars. If you own a Saab or Saturn new ownership may bring changes at your dealership, as these brands transition under new ownership. Hummer may be sold to Chinese truck maker Tengzhong. Pontiac will be closed. Through these changes, it is expected that more dealerships will also close.

If you’re thinking of buying a GM car or truck, the company is offering great incentives right now. But it’s important to remember that any deal is only as good as the vehicle you’re buying. Consumer Reports recommends the Buick Lucerne V8, the Cadillac DTS, the Chevrolet Avalanche, HHR, Malibu, and Silverado, and the GMC Sierra.

So if you’re looking for a new American car, these models might be a good place to start.

Use our new car selector to compare models based on ratings, reliability, safety, cost, and the factors that matter most to you.

—Eric Evarts

Read "What does the GM bankruptcy mean to you?" To get more answers to the most common questions and concerns about GM’s bankruptcy, visit our Auto Crisis hub.

Comments

[Ann]

This whole fake illegal bankruptcy by GM is STUPID.

[Stratojet]

"This whole fake illegal bankruptcy by GM is STUPID."

This is what evereybody wanted for so many months, if not years. Now that this has been happening, then it is fake and stupid. May I remind you that this is the real thing with real lawyers and also real damages to the corporation, employees, suppliers, families. Chapter 11 is not supposed to be fair. It is going on all the time in the construction business and nobody says it is illegal. Wake up Ann...
"

[Skater]

Not Good at all

[sspeedracer]

Lemon Socialism at best, Fascism at worst. Judge Gerber needs to pull his head out of the sand.

If a company can't make a profit because nobody wants to buy its product then it needs to fail. The only thing that happened yesterday is that major investment banks were allowed to exit with their assets intact while leaving the US tax payer and workers behind to go down with the ship.

An overwhelming majority of Americans didn't want to bail out nor purchase GM debt. But did the Executive and Legislation Branches listen? Nope, they are too busy accepting donations from the investment banks. Who does the Federal government work for? It ain't you or me.

Thank you Obama, Pelosi, Reid for the ensuing economic collapse. It will only get worse.

[felix]

Has anyone seen this site for GM car and truck parts ? Will they still be open?