New York - US carmaker General Motors could exit bankruptcy
in record time and come under the control of the US government by the
end of this week, as a Thursday deadline for challenges expired.
A New York judge on Sunday night approved GM's plan to sell its
best assets into a new company that would be majority owned by the US
Treasury. The decision put GM on a path to exit bankruptcy less than
two months after seeking court protection on June 1 - a speed that
has surprised most experts.
But a group of Arizona accident victims filed a last-minute appeal
to block the sale Thursday, fearing that a post-bankruptcy GM will
not be liable for their damages claims. Judge Robert Gerber had set a
noon (1600 GMT) deadline for all appeals to be filed.
The Wall Street Journal reported the court appeal had little
chance of success and was unlikely to stop GM's sale to the
government. GM said it would hold a press conference Friday morning,
which could set the stage for its formal exit from bankruptcy.
US President Barack Obama's administration has set its own
ultimatum of Friday for the sale to go through, threatening to
otherwise pull 30 billion dollars in funding.
The Treasury is set to get a 60-per-cent stake in GM in exchange
for the loans. The Canadian government, which has also provided
billions of dollars, will get 12 per cent. A union health care trust
will take 17.5 per cent and bondholders will get the remaining 10 per
cent.
GM's reorganization plan has been challenged by some bondholders,
dealerships and labour unions that hoped for a better deal through
liquidation. But all have so far been blocked by Judge Gerber, who
warned Sunday that GM's collapse would be a 'disastrous result' for
the entire auto community.
Once the world's largest carmaker, GM will emerge from the
bankruptcy process a much smaller company. The Detroit manufacturer
will leave behind a series of brands that are being sold off or
liquidated, including Pontiac, Saturn, Hummer, Opel and Saab.
The Obama administration meanwhile was also mulling what kind of
pension to give ousted GM chief executive Rick Wagoner, who was
forced out in March as part of the government's massive bail-out of
the troubled manufacturer.
Wagoner is retained on a nominal one-dollar-a-year salary, but now
Washington must decide what sort of exit package to offer the 56-
year-old former boss.
Some media reports have put the figure Wagoner is contractually
entitled to at up to 20 million dollars, making it a tricky political
decision for an administration hit by a public outcry at handouts of
taxpayers' dollars.
No decision has yet been made on his package, according to
Treasury officials. Obama has in the past expressed outrage over
bonuses and excessive payments to the managers of failing businesses
in the current economic crisis.
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