Business News

GM hopes bankruptcy court will back government takeover

Jun 30, 2009, 16:05 GMT

New York - Struggling US car giant General Motors was in bankruptcy court Tuesday, hoping to get approval to shed its worst performing brands and emerge from bankruptcy under the government's control. But GM's plan is being challenged by a number of GM's creditors and the New York court hearing was expected to last several days. GM filed for bankruptcy at the start of June, becoming the largest US manufacturer ever to seek court protection. It hopes to emerge from the process within 60-90 days. GM's chief executive Fritz Henderson was expected to defend GM's restructuring plan before the court. Some workers protested outside the building in lower Manhattan over GM's plans to axe jobs and cut benefits. The US and Canadian governments will together hold 72 per cent of 'New GM' when it does leave the bankruptcy process, in exchange for more than 30 billion dollars in new loans to keep it afloat, but has said it will not be involved in the company's day-to-day management. Creditors would get 10 per cent of the new company and a union health care trust will take a 17.5-per-cent stake. The hearing comes three weeks after smaller US rival Chrysler emerged from the bankruptcy process in less than two months, offering some hope to GM executives that they, too, can survive the process.

Business News

GM hopes bankruptcy court will back government takeover

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