GM in court to defend reorganization plans

NEW YORK -- General Motors will make its case for spinning off the company's good parts into a new GM and defend itself against hundreds of objections to the sweeping reorganization plan in federal bankruptcy court Tuesday.

GM Chief Executive Officer Fritz Henderson could be called as a witness, paperwork filed with the court says.

He will likely reiterate that GM's bankruptcy plan, which is backed by the Obama administration, is the only option for the struggling Detroit automaker. The company is staying afloat only because of federal loans received over the past six months.

Opponents of the restructuring demonstrated their unhappiness outside the courthouse.

A group of GM retirees organized by the IUE-CWA protested over the company's plans to terminate some retiree health care benefits.

Consumers who allege they were injured by defective GM products were also on hand to show their displeasure with GM's plan to shed liability for defects prior to the bankruptcy filing.

About 850 written objections to GM's bankruptcy plan have been received by either the company or the court, according to court files.

GM lawyers acknowledge that hundreds of parties have filed objections to GM's bankruptcy plan but note that no one has suggested "any viable alternative transaction, purchaser or financing source," according to court records.

Furthermore, GM lawyers argue that no party has argued against GM's contention that the only alternative is liquidation or the "draconian consequences to employees, suppliers, dealers, communities and the overall U.S. economy if the" bankruptcy plan "is not consummated."

They state that "approximately 99% of all dealers" have agreed to ongoing participation or wind-down agreements.

Finally, GM lawyers say: "No party or person has expressed an interest or proposed a higher or better offer or any other financing proposal."

GM says objections to its plan generally fall into 11 groups:

— Bondholders.