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Bankruptcy Court Approves GM Restructuring Plan

07/06/2009
After three days of hearings to address more than 850 objections, a federal judge has approved the sale of General Motors Corporation's (GM) assets to a newly structured, government-funded company, essentially clearing the way for the automaker to emerge from bankruptcy. A company statement says that GM will sell "substantially all" of the original General Motors Corporation to NGMCO, Inc., an entity funded by the U.S. Department of the Treasury. At the closing of the sale transaction, NGMCO, Inc. will change its name to General Motors Company and will operate under the GM corporate brand. The new GM will continue to be headquartered in Detroit, Michigan, and current president and CEO Frederick A. "Fritz" Henderson will retain his position. The ownership structure of the new GM will be: Treasury Department, 60.8 percent; United Auto Workers (UAW) Retiree Medical Benefits Trust, 17.5 percent; Canada and Ontario governments, 11.7 percent; and the "old" GM, 10 percent. "A healthy domestic auto industry remains vital to the global economy, and we deeply appreciate the support of the U.S., Canadian, and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many," says Henderson. "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." The company says the judge's ruling includes a four-day stay before the sale closing can take place, but that it is expected to take place in the near future; The New York Times reports that GM is hoping to close on Thursday afternoon when the stay expires.

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