Business NEWS

Judge Robert E. Gerber Approves GM Plan to Sell Assets: NGMCO INC.

By Amarendra Bhushan for CEOWORLD Magazine Updated:July 6, 2009


A U.S. judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved General Motors Corp’s bankruptcy sale in a move that will allow the company’s most profitable assets to exit bankruptcy protection under government ownership.

The sale of substantially all of its assets to NGMCO, Inc., an entity funded by the U.S. Department of the Treasury.

In connection with the closing of the sale transaction, NGMCO will change its name to General Motors Co. and continue to operate under GM’s corporate and sub brands.

Under the deal, ‘New GM’ will operate the best parts of the old company, including its Chevrolet and Cadillac brands, with a less expensive workforce, smaller dealer network, and much less debt.

The rest of the company will be liquidated.

G.M.’s chief executive of three months, Fritz Henderson, is expected to hold that position in the new company. The Obama administration has already designated several directors for the new G.M., including Edward Whitacre, AT&T’s former chief executive, as chairman. The company will be represented on an interim basis by Cadwalader, Wickersham & Taft, the law firm that advised the auto task force.

Old G.M. will stay in bankruptcy, overseen by the company’s current chief restructuring officer, Albert A. Koch of the turnaround firm AlixPartners.

During the three days of lengthy oral arguments and testimony, GM tried to convince Gerber that the deal with U.S. Treasury-funded Vehicle Acquisition Holdings LLC was the best alternative before the company, other than liquidation.

Under the deal, GM would sell its most desirable assets, including its well-known Chevrolet and Cadillac brands, to a new company owned largely by the U.S. and Canadian governments and a health care trust for the United Automobile Workers union. It’s expected the new company, which will still be called General Motors, will be taken public in 2010.

The sale will preserve hundreds of thousands of GM jobs in North America, and around the world, and bolster a reeling network of auto industry suppliers.

Under the plan, U.S. taxpayers would end up owning 60 percent of the new GM, with other stakes held by Canadian governments, bondholders and the United Auto Workers union.

Holders of $27 billion in GM bonds would get stock in the reorganized company, as would a union-controlled trust fund that would take stock rather than the $20 billion in cash it had been owed to pay future retiree health care costs. Those 650,000 retirees would have their coverage reduced.

GM plans to close more than a dozen factories, drop U.S. brands and close up to 40 percent of its network of 6,000 dealerships.

Google Buzz

Like this article!

Share this Post:
  • Digg
  • del.icio.us
  • Facebook
  • Google Bookmarks
  • email
  • FriendFeed
  • LinkedIn
  • MySpace
  • RSS
  • StumbleUpon
  • Technorati
  • Yahoo! Buzz
  • Identi.ca
  • PDF
  • Wikio
  • Mixx
  • Print
  • Propeller
  • SphereIt
  • Sphinn
  • Suggest to Techmeme via Twitter
  • Tipd

Get It Delivered To Your Inbox


Readers Rating:
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...
Popularity:
171,441 views
Leave a Comment:
add your comment
Tagged with: , , , , , , , , , ,
  • Caud..Franco
    RE:..GH...greed:.........7.30..9

    odama.said.to..purchase.stocks.to.redo.ecomomy......

    this.is.why..you..lose.hope.with.GM..&..mkt

    Odama.would..rather.play..""anger..management""..therapist

    wirh..COPS..and..PROFS..than.save.us.investors..from.

    bad.REGS.&.JUDGES..!!!

    Caud..Franco..from....LV....Pa
  • harriet
    what does that mean to the current stock holders should they hold firm or will their shares go away
  • KentuckyBoy
    GM is losing market share in the U.S.
    GM is losing a larger percentage of market share in Europe.
    GM's labor costs are still higher per until of procuction than those of Toyota, Honda, etc.

    I really do not care as I will never purchase any of their products again - Good-Bye, sleep tight.
blog comments powered by Disqus


Follow CEOWORLD Magazine

96357 RSS and 9500 Twitter Subscribers

Enter your email address:

Post a Job on CEOWORLD Magazine

Jobs on ceoworld

CEOWORLD Magazine on Facebook

Market summary



CEOWORLD News

EE Times Europe Launches New Website

EE Times Europe team unveiled its new website: http://www.electronics-eetimes.com/. Presenting a cleaner look, improved [...]

MySpace founders Chris DeWolfe, Colin Digiaro, and Aber Whitcomb to acquire MindJolt with Austin Ventures partnership

MySpace Founders Chris DeWolfe, Colin Digiaro, and Aber Whitcomb today announced a partnership with Austin Ventures, to [...]

General Motors Co. vice chairman, Bob Lutz set to retire

General Motors Co.’s (GM, news: 0.75 0.00 0.00%, cap: N/A, 1yr target: 0.00) vice chairman, Bob Lutz, will retire [...]

Greece Prime Minister George A. Papandreou on Twitter

Greece Prime Minister George A. Papandreou has a Twitter @PrimeministerGR account. Along with his Twitter account, the P [...]

Music streaming service Mog Gets Another $10 Million

MOG, A music streaming service with backing from both Universal Music Group and Sony Music, has raised $9.5 million in a [...]

Advertisement!

CEOWORLD Magazine

Poland Business Guide


cosmos yachting LLC

lucentbyte


Global business networking



An International Business and Online Marketplace offers B2B Leads & promoting B2B Products of Worldwide Importers & Exporters


Get Chitika Premium

Thank you!

Quick Links:     Journalist Association of Europe Member   ·   Careers   ·   Subscription   ·   CEOWORLD Exchange   ·   Contact Us   ·   Terms of Use   ·   About us   ·   Advertise