GM bankruptcy exit hearing closes

July 03, 2009 11:35:28 AM

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The fate of General Motors was placed in the hands of a New York judge Thursday who must decide whether the largest US automaker can execute a swift exit from bankruptcy protection by selling its best assets to a new company.

"We're adjourned," Judge Robert Gerber said around 4:00 pm (2000 GMT) after three days of hearings in which a host of creditors mounted objections to the plan which will create a leaner GM unburdened by old debts and supported by billions in government loans.

GM's lawyers and chief executive officer argued that the asset sale is the only way to save the struggling automaker from a devastating liquidation through the more lengthy Chapter 11 bankruptcy process.

Gerber did not indicate when he would publish his decision and told the various parties to send their final requests to him by e-mail.

Sources close to the case said the decision could come as early as this weekend as several lawyers said they could file their final motions on Friday and Saturday.

In the precedent-setting case of rival Chrysler's bankruptcy, the judge published his approval of the asset sale on the weekend on the court's website.

Under the proposed plan, the US government will own 60.8 percent of the capital in exchange for some 50 billion dollars in emergency loans.

Canada, which also provided billions in loans, will have 11.7 percent and a United Auto Workers retiree health care trust fund will hold 17.5 percent.

Creditors holding GM bonds will swap 27.1 billion dollars in debt for a 10-percent stake and warrants allowing them to buy an additional 15-percent stake.