GM Awaits Judge's Ruling on Sale Plan

File - A pickup truck moves by the main entrance to the General Motors plant in Doraville, Ga. in...

File - A pickup truck moves by the main entrance to the General Motors plant in Doraville, Ga. in this November 21, 2005 file photo. General Motors Corp. may have to wait out the long holiday weekend to learn if its bankruptcy plan is moving forward, after U.S. Judge Robert Gerber adjourned a three-day hearing Thursday July 2, 2009 without indicating when he will rule on GM's plan to sell its good assets to a new company. The remaining pieces of the company, including some closed plants, will become the "Old GM" and will be liquidated. (AP Photo/Gene Blythe, File)

(AP)

Richman said that while the company may be powerless to fight the government's demands, the court can "push back" to protect the interests of all the company's stakeholders. The trio of bondholders Richman represents hold just a fraction of GM's unsecured debt. One of the members bought his bonds for just 2 cents on the dollar, while the other two spent no more than 20 cents on the dollar for theirs.

Miller contended that with the government unwilling to provide funding for a restructuring and no other lenders out there to take their place, the sale plan is GM's only option for survival. He also said an extended stay under court protection hurts GM's ability to attract and keep customers. Richman countered that GM's sales for June, though down about 30 percent, were slightly better than the company expected.

Hundreds of parties, including bondholders, unions, state officials, consumer groups and individuals, have filed objections to the sale, threatening to hold up the process.

Last month, numerous objections also dragged out rival Chrysler LLC's sale hearing for three days before it was approved by the bankruptcy judge in that case. A group of the automaker's bondholders and consumer groups also appealed the sale all the way to the Supreme Court before it ultimately went through and the automaker emerged from court oversight as a new company.

As part of the sale plan reached with the auto task force, the U.S. government will get a 60 percent stake in the new GM in exchange for what's expected to eventually total nearly $50 billion in aid.

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.

Existing GM shareholders are expected to be wiped out.

The remaining pieces of the company, including some closed plants, will become the "Old GM" and will be liquidated.