GM 363 Asset Sale Approved By U. S. Bankruptcy Court
Judge Robert E. Gerber of the U. S. Bankruptcy Court for the Southern District of New York approved the sale of substantially all of General Motors Corporation's assets to NGMCO, Inc., an entity funde...
Judge Robert E. Gerber of the U. S. Bankruptcy Court for the Southern District of New York approved the sale of substantially all of General Motors Corporation’s 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, Inc. will change its name to General Motors Company and continue to operate under GM’s historic corporate and sub brands.
The new company will acquire GM’s strongest operations and will have a competitive operating cost structure, partly as a result of recent agreement with the United Auto Workers (UAW) and Canadian Auto Workers (CAW).
The new GM will be headquartered in Detroit and will be led by Fritz Henderson as president and chief executive officer and Edward E. Whitacre, Jr. as chairman of the board of directors. Also, GM’s subsidiaries outside the United States will be acquired by the new company and are expected to continue to operate without interruption.
“A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U. S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many. This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades. Now it’s our responsibility to fix this business and place the company on a clear path to success without delay,” said Henderson.
The new GM’s common stock will be owned by: U. S. Department of the Treasury: 60.8 per cent; UAW Retiree Medical Benefits Trust: 17.5 per cent; Canada and Ontario governments: 11.7 per cent; and the old GM: 10 per cent.
Additionally, the old GM and the UAW Retiree Medical Benefits Trust will hold warrants that are exercisable for 15 per cent and 2.5 per cent of the interests in the new GM, respectively. The UAW Retiree Medical Benefits Trust and the Canadian government each may nominate one member to serve on the board of the new GM. The retiree benefits trust has selected seasoned auto industry analyst Stephen Girsky. Judge Gerber’s order includes a four-day stay before closing of the sale can occur. However, GM expects the sale to close in the near future.