GM Assets Sale Approved

Much sooner than expected, the sale of GM's assets to the new company has been approved yesterday by Judge Robert Gerber of the U.S. bankruptcy court in Manhattan. The judge motivated his decision by saying that the approval would "prevent the death of the patient on the operating table."

"If GM liquidates, there will not only be nothing for stockholders; there will be nothing for unsecured creditors," the judge added, in an entire ruling which is a 95 page-long document.

Now that the sale has been approved, the new GM will look like this: the US Treasury will give the automaker $60 billion in financing, receiving in return a 60 percent stake in the new GM. The UAW will receive a 17.5 percent stake on account of GM's debts, while the Canadian government will take around 12 percent of the company's shares. GM's bondholders are poised to receive 10 percent of the company.

Still, an auto task force official said earlier this month, according to Reuters, that the new GM would be put under an initial public offering as soon as next year.

The sale was approved despite some opposition from GM a group of bondholders who have filed a motion asking for the court to block the sale on the grounds that the US government is trying to circumvent the bankruptcy law.

No word has yet come from GM in response to yesterday's ruling, but the manufacturer is expected to do so sometimes today.

In the US, the approval of GM's asset sale is being regarded as a new victory for the Obama administration, after the emergence from bankruptcy of the other troubled manufacturer, Chrysler.