Detroit (WWJ) -- Many experts said it couldn't be done this fast, but General Motors is closer to a new beginning and ready to exit from Chaper 11 bankruptcy protection Thursday.
Bankruptcy judge Robert Gerber's order approving the sale of most of GM's assets to a new company went into effect at noon Thursday. An appeal was filed just before the deadline by plaintiffs in an Arizona product liability lawsuit against the automaker, but the filing was not expected to stop the process.
John Pottow, a University of Michigan Law School professor who specializes in bankruptcy, said opponents have little legal recourse to block the sale because their issues were shot down by higher courts in Chrysler's bankruptcy case.
"It's done,'' Pottow said. "I knew they were dead as soon as the Chrysler case was decided.''
He expects GM to close the deal and emerge from bankruptcy on Thursday in 39 days, a record for a company its size, he said.
GM lawyers were preparing documents to close the sale as quickly as possible, but company spokesman Tom Wilkinson said he could not give a time frame.
General Motors has scheduled a 9 a.m. news conference Friday. CEO Fritz Henderson and GM Chairman Ed Whitacre are expected to discuss the future of the company. You'll hear live coverage on WWJ Newsradio 950 and WWJ.com.
After clearing bankruptcy court, the new GM will focus only on four core brands, Chevrolet, Cadillac, Buick and GMC. The company is in the process of selling Saturn, Saab, Hummer and its Adam Opel GmbH unit in Europe, and it will discontinue Pontiac by the end of the year.
GM would not have been able to clear bankruptcy court at such a high speed without help from its crosstown rival Chrysler Group LLC, which exited bankruptcy on June 10 after 42 days.
The U.S. government, which will wind up loaning GM up to $50 billion to save its roughly 88,000 U.S. jobs, also played a significant role through the Treasury Department's auto task force, Pottow said.
"It's amazing what you can do when you have a government task force convened to help your company,'' he said.
The government provided bankruptcy financing, and the task force served the role of management consultant, telling GM that its early restructuring plans were too rosy and demanding further cuts, he said.
The parts of the company not moving over to the new company will become part of "old GM,'' a collection of assets and liabilities that will be liquidated over the next few years and sold off to pay the company's various creditors including people with pending lawsuits.
The assets range from the expected things, such as closed plants and other facilities, to more quirky items including a golf course in New Jersey and a church in Indiana.
The government has pledged $1.18 billion to help fund the wind down.
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