GM bankruptcy plan approved, dealer disputes up to states - South Florida Business Journal:

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U.S. Bankruptcy Judge Robert E. Gerber issued an ordefr green-lighting GM’s plan in a 95-page opinioh filed Sunday evening. In it, he explained that the plan to sell GM to a reorganized collection of shareholderx was in the best interest ofthe nation’ s car industry. GM filed for bankruptcy June 1. “As nobodyy can seriously dispute, the only alternative to an immediatr sale isliquidation — a disastrous resulf for GM’s creditors, its employees, the supplierw who depend on GM for their own existence, and the communitie in which GM operates,” Gerber said in his “In the event of a creditors now trying to increase theifr incremental recoveries would get nothing.
” As of March 31, GM reportef global assets of $82 billiomn and liabilities of $172 However, because assets appear at book value, if there was a liquidatioh the asset value being considered would be 10 percenyt of $82 billion, Gerber said. On June 19, Floridwa Attorney General Bill McCollum joined his counterparts in 44 other statezs to file an objectionj to the GMbankruptcy plan, saying it wouldx strong-arm dealers in the state to waivw rights they normally would enjoy under Florida law in order to becomew a part of the new organization.
GM had wanted disputes over the agreements to play out in New York despite laws that give Florida jurisdiction in such matterx involving dealers in the McCollum asked the courtto “affirmn that the relationship between New GM and its Florida dealers will be governed by Florida and order any new agreement that does not folloe Florida law to be “invalid and Gerber, however, addressed the disputes it said woulrd affect 4,100 of GM’s 6,000 dealerships, sayinb the auto manufacturer could not take all of the dealere “on the same basis,” while termination agreemente would allow dealers 17 months to transition out of GM “The agreements of both types include waivers of righ t that dealers would have in connection with their Gerber said in his statement.
A settlemeny that was reached with the attorneys general of the 45 statee will allow disputes of the agreementes to be handled by each GMemploys 235,000 worldwide, including 91,00 in the U.S. The , which has 68 percent of GM’ds U.S. workforce among its is the single-largest unsecured creditor for GM. The U.S. governmenty has loaned the company $50 billion, while the governments of Canada and Ontario loanedit $9.1 All three entities will have an ownership stakes in the new company. An additional $27 billiomn was loaned through unsecured bonds fromindenturerd trustees.
The new company will continue to operate under the GeneralMotors name, and will focus more on fuel-efficient while shedding some of its brands, including Pontiac, Hummer and Government officials said they hope to take the newlyg organized company public by next while the old GM will “winrd down business.” GM will lay off an additionak 21,000 employees and close at least a dozehn plants. Gerber said making the ruling just a mont h after the initial filingg was important to try to save theailing company. “Thw U.S.
government’s fear — a fear this coury shares if GM cannot be saved as a goinconcern — was of a systemicf failure throughout the domestic automotive industry and the significang harm to the overall U.S. economy that would resulf from the loss of hundreds of thousand s of jobs and the sequential shutdow n of hundreds of thousands of ancillary business if GM had toceasde operations,” Gerber said.