GM gets approval for sale

The new company will be jointly owned by American and Canadian governments and the United Auto Workers union.

The decision comes after three days of hearing that wrapped up Thursday. In the hearing, the GM had requested for sale approval to keep the company afloat.

Sale to protect GM
Issuing the ruling as the only option available, Gerber said the deal will avert “the death of the patient on the operating table".

In an 87-page opinion, Gerber stated, “As nobody can seriously dispute, the only alternative to an immediate sale is liquidation -- a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates.”

“In the event of a liquidation, creditors now trying to increase their incremental recoveries would get nothing,” he further said.

Judgment against creditors
The judge received around 850 objections to the reorganization plan, but rejected them as invalid.

The lawyers for some of GM’s creditors had urged for rejection of sale saying that the resultant move would sideline their needs in the interest of GM and the government.

Several consumer groups argued that the move would free the new company from responsibility towards consumer claims arising from incidents that took place before GM filed for bankruptcy protection.

Joanne Doroshow of the Center for Justice & Democracy said the issue "is far from over".

"It is morally reprehensible that GM will pay for injuries and deaths that occur after the bankruptcy process, but not for the hundreds of victims who have already been hurt by defective GM cars," Doroshow said.

The new GM will get $60 billion from the U.S. Treasury. The U.S. government will have 60 percent share in the new firm while Canada's government will own 12 percent stake. United Auto Workers union would have 17.5 percent and GM bondholders would own around 10 percent.