GMAC Responds to GM's Sale Approval

Finance company GMAC has issued a somewhat ironic statement yesterday, in response to the bankruptcy's court approval of the GM asset sale. The bank holding commends the approval and explains what will happen to the contracts GMAC has with GM. According to GMAC, all these contracts will be transferred to General Motors Company.

"GMAC Financial Services has been notified that the U.S. Bankruptcy Court has approved the sale of assets of General Motors Corporation to an entity sponsored by the U.S. Treasury. In conjunction with the closing of the sale, the contracts GM has with GMAC will be transferred to the new GM entity," GMAC said in the statement.

"GMAC is pleased to conduct its business operations with the new GM entity and to be part of the solution to stabilize and strengthen the U.S. auto industry."

The finance company also says it will continue to offer financing to both GM and Chrysler dealers and customers. Yet, in late June GMAC started suspending floorplan financing for an unspecified number of Chrysler Group dealers for 30 days.

During this time, dealers must prove their creditworthiness to continue inventory funding, as Mike Stoller, GMAC spokesman said. In case they don't the dealers will be offered an unspecified period of time to find themselves other lenders.

GMAC blamed this on the US government and their rule that would restrict the amount of loans that GMAC could make to Chrysler's customers and dealers because both firms are owned in part by Cerberus Capital Management.