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Obama's auto task force wants bankruptcy to move along. Some parties object
Published on Thursday, Jul 02, 2009
Associated Press
NEW YORK: A senior member of President Barack Obama's auto task force testified Wednesday that the U.S. government will not continue to fund General Motors' operations if the automaker doesn't get approval to sell its assets to a new company within the next 10 days.
''We have no intention to further fund this company if the sale order is not entered by July 10,'' said Harry Wilson, one of the Treasury Department officials overseeing GM's restructuring, while being cross-examined by an attorney for a group of GM bondholders opposing the sale.
The automaker's government-backed plan for a quick exit from Chapter 11 hinges on the sale plan, which would allow it to leave behind costs and liabilities that have made the company unprofitable.
The Detroit automaker, whose June 1 filing for bankruptcy protection was the fourth-largest in U.S. history, is hoping to avoid a lengthy court battle over the sale.
Hundreds of parties including bondholders, unions, state officials, consumer groups and individuals have filed
objections to GM's plan, threatening to hold up its sale.
As part of a deal brokered with the auto task force, the U.S. government will get a 60 percent stake in the new company in exchange for the billions in tax dollars it has pumped into GM over the past several months in order to keep it afloat.
The Canadian government, which has also contributed billions in aid, will get a 12.5 percent stake while the United Auto Workers union will take a 17.5 percent share to fund its health care obligations. Unsecured bondholders receive the remaining 10 percent.
Three labor unions say that their retirees stand to lose health care benefits if the sale goes through as approved. Unlike the UAW, which brokered a deal for a stake in the company, those unions say they won't have anything to pay for retiree health care.
Get the full article here.
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