New York federal bankruptcy court approves restructuring of General Motors.
New York, NY (JusticeNewsFlash.com)–The New York Times reported a federal judge, residing in the United States Bankruptcy Court in Manhattan, approved a restructuring plan of General Motors (GM) on Sunday. The plan, which was approved on July 5, will allow GM to sell its most desirable assets to a new government-backed company. The ruling is an important step for GM to restructure and settle the American automaker’s bankruptcy claim through the U.S. federal bankruptcy court system. The bankruptcy judge, Robert E. Gerber, handed down the decision after three days of hearings which addressed 850 objections brought forth by litigants. The Judge’s ruling came after he received the revised sale order from GM’s attorneys. Judge Gerber stated he agreed with the automotive company’s and their business litigation attorney’s main idea which contends the sale of GM’s assets was needed to shield its business from steep losses. GM’s stance also asserts government financing will run out at the end of the week leaving the big automaker penniless.
Under the new terms of GM’s restructuring, the automaker will sell some of its most desirable assets, such as the Chevrolet and Cadillac brands, to a new government-backed company. The new automobile manufacturing company will be under the joint ownership of American and Canadian governments, along with a health care trust for the United Automobile Workers (UAW) union. The Obama Administration is reportedly taking on the new company, which will still hold the original General Motors name, and is anticipated to go public next year. Reportedly, the new GM will then turn itself into a smaller company, which will offer fewer brands and focus on fuel-efficient cars, trucks, and SUVs.
Plaintiff’s attorneys fighting against the restructuring plan, which include product liability claimants and asbestos litigants, argue that most of their claims against GM will become void. Personal injury lawyers say injured consumers will most likely be unable to recover compensation for their damages and injuries under the terms of the sale agreement and the bankruptcy restructuring of GM.
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