Thursday, June 25, 2009

GM gets go-ahead on bankruptcy financing

NEW YORK – General Motors Corp. won approval today to use up to $33.3 billion to pay for its bankruptcy today, after making a few changes to settle technical objections.

The step marks another major milestone in GM’s dash through bankruptcy court, which it and Obama's auto industry task force hope to complete with the creation of a new, government-owned GM by the end of the month.
The financing was approved by U.S. Bankruptcy Judge Robert Gerber in a matter of minutes after Harvey Miller, GM’s lead bankruptcy attorney, said the company had made some small changes to settle concerns of creditors and local governments.

About $30.1 billion of the money comes from the U.S. Treasury, with the additional money coming from the Canadian government.

The U.S. Treasury also added a clause that Gerber accepted stating it was legal for the government to pay for GM’s bankruptcy using money from the $700-billion financial industry bailout. That had been a legal objection raised unsuccessfully by Chrysler LLC investors opposing its bankruptcy plan.

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