New General Motors expected to quickly emerge from bankruptcy
Despite objections, General Motors Corp. is expected to quickly emerge from Chapter 11 bankruptcy when it asks a judge today to approve its plan to begin operating as a new company, the Associated Press reported.
Chrysler LLC’s quick approval to sell the bulk of its assets to Fiat Group SpA despite bondholders’ and other objectors’ appeals all the way up to the Supreme Court has helped pave the way for GM to move through the courts quickly, experts say.
General Motors plans to sell most of its assets to a newly created company that will be 60 percent owned by the U.S. government. The Canadian government will have a 12.5 percent stake, the United Auto Workers union will have a 17.5 percent stake to fund its health-care obligations, and unsecured bondholders will receive 10 percent. Existing GM shareholders are expected to be left empty-handed.
Some closed plants and other assets will become the “Old GM” and be liquidated.
Objectors to the plan include bondholders who claim they deserve more for their investment, state officials worried about the economic effects of restructuring and other unions, including the United Steel Workers and International Union of Operating Engineers, who claim their retirees will lose health-care benefits.