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.
Dancing For Charity at the South Oakland Shelter 11/07
WWJ's Marie Osborne spoke live with Kevin Roach the Executive Director of the South Oakland Shelter. This is a charity event where area politicians, business leaders and media personalities will be pairing with professional dancers.
Movie Boot Camp 11/7
Larry Meistrich a veteran producer, talks about a three day filmakers workshop next weekend which he will host.
Health Care Overhaul 11/7
A live WWJ interview with AFL-CIO President Mark Gaffney on today's health care rally in Royal Oak.
China Mission 11/7
Wayne County Executive Robert Ficano further elaborates on the trip to China for himself and a board of delegates.
WWJ Newsradio 950 is Detroit's only all-news radio station and is the leader in Detroit radio news. Listen online to WWJ-AM 950 for live, local Detroit news, up-to-the-minute Detroit traffic, Detroit sports, Detroit business and Detroit community information. WWJ Newsradio 950 is an award winning radio station and you can listen online and podcast on demand Detroit news, Detroit Construction Alerts, Detroit School Closings, Winter Survival Guide and learn more about our Business Breakfasts. www.wwj.com.
E-Mail Story
Print Story
