All that could be done has been done... The three day long hearing of GM's case in bankruptcy court ended and now the American manufacturer is awaiting the approval of assets sale over to the new company. As was to be expected, not all went smooth, as objections have been raised.
A group of bondholders have filed a motion with Judge Robert Gerber asking for the court to block the sale on the grounds that the US government is trying to circumvent the bankruptcy law. GM's main argument was that if the sale is blocked, the consequences will be catastrophic.
"The objectors are asking your honor to play Russian roulette. These are assets that will deteriorate in value, and that deterioration will be felt by all stakeholders," Harvey Miller, GM's lead bankruptcy attorney argued.
The court is expected to make a ruling by July 10. Should the ruling be in favor of GM, the terms of the deal reached with the US government are as followwould mean major change for the carmaker.
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.
The general idea is that the sale will be approved, as some 50 percent of GM's bondholders are in favor of the sale. And indeed, the consequences of a blocked sale would be hard to foresee for the American automotive industry.
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