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post #1 of 1 (permalink) Old 07-08-2009, 08:30 AM Thread Starter
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Post Judge denies GM Fast Track turnaround

A federal bankruptcy judge has denied a motion by two groups to fast-track their appeal of the sale of General Motors Corp.’s good assets.

U.S. Judge Robert E. Gerber late Tuesday didn’t detail in court why he was denying the motions, saying that he would issue a written ruling later in the evening.

A group of five individual accident victims and asbestos claims litigants filled motions late Monday asking Gerber to certify their appeal for immediate hearing by the U.S. Court of Appeals in New York.

Gerber, in a 95-page opinion issued late Sunday, approved the sale of GM’s good assets to a group backed by the Treasury Department, saying the deal will “prevent the death of the patient on the operating table.”

In the Chrysler bankruptcy, U.S. Bankruptcy Judge Arthur Gonzalez certified the appeal of secured creditors, who have more legal rights than GM’s objecting unsecured creditors. The appeals court agreed to hear the Chrysler case and ruled just 17 minutes after hearing oral arguments, rejecting efforts to block the sale of the Auburn Hills automaker’s assets to a group led by Fiat SpA.

The creditors wanted to leapfrog the U.S. District Court so they could get a quick hearing.

Tuesday afternoon, GM and the U.S. Attorney’s Office objected to the groups’ request.

GM had urged the judge to reject attempts to certify an appeal by the accident victims and asbestos claims litigants, arguing similar issues already were addressed in the Chrysler case.

“In light of its recent decision in Chrysler, it is likely that the Second Circuit will likewise question the need for such extraordinary relief, i.e., to revisit issues it has just addressed,” GM lawyer Harvey Miller wrote in a court filing.

In the Chrysler case, the 2nd Circuit Court of Appeals concluded such asset sales can be consummated free and clear of tort liability, the U.S. Attorney’s Office wrote in a court filing Tuesday.

“Any stay pending appeal must be conditioned upon a substantial … bond to protect new GM and the debtors’ stakeholders from the potentially disastrous consequences if the sale does not close promptly,” Assistant U.S. Attorney Matthew Schwartz wrote.

If the sale survives appeals, GM will be able to leave behind many product liability claims in bankruptcy.

Gerber gave opponents until noon on Thursday to win a court delay of his ruling that the asset sale can go ahead. GM and the Treasury Department, which will own 60.8 percent of GM, could close on the deal late Thursday.

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