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Bankruptcy Law

GM Files for Bankruptcy; Judge Approves Chrysler Sale

Posted Jun 1, 2009 7:37 AM CDT
By Debra Cassens Weiss

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General Motors filed for bankruptcy this morning under a restructuring plan that calls for the United States to own 60 percent of GM stock.

The filing says GM has $82.3 billion in assets and $172.8 billion in debts, the New York Times reports. In a briefing Sunday night, administration officials said the government will invest another $30 billion in the automaker, in addition to $20 billion already spent.

Overseeing the case is U.S. Bankruptcy Judge Robert Gerber of Manhattan. At the time of his appointment in 2000, he was a partner in Fried, Frank, Harris, Shriver & Jacobson in New York, according to an online profile.

Weil, Gotshal & Manges will represent GM, Times Online reports.

A key legal issue, according to the Washington Post, is whether bondholders could get more for their debt in a liquidation rather than a reorganization.

The filing comes one day after a bankruptcy judge approved the sale of Chrysler to a new company owned by Fiat, the Washington Post reports in a separate story.

Prior coverage:

ABAJournal.com: "Lawyers Joke that GM Bankruptcy Will Deplete Experienced Bar"

Additional coverage:

Crain's Detroit Business: "Local Attorneys: General Motors’ Bankruptcy Messier than Chrysler’s"

Newsweek: "The Bankruptcy Parasites"

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