GM Bankrutpcy
Founded in 1908, General Motors, for many years the largest automotive manufacture in the world, filled for bankruptcy in June 2009.
After losing hoards of money and burning its remaining cash, General Motors was forced to run to the U.S. government to keep it self afloat by winter 2008. GM was challenged by the government to come up with a viable plan to avoid bankruptcy, but as sales continued to plummet in early 2009 the U.S. government was forced to step-in. A normal bankruptcy liquidation of GM was considered to be too detrimental to the fragile economy, which was already in a very weak state due to the credit crisis. To avoid a GM bankruptcy liquidation and hurting the economy further, in April 2009 the U.S. Treasury provided billions more in backing to the hobbled company and started working on renegotiating the company's massive debt load with VEBA, GM's healthcare trust, and bond holders. After looking over the company and working with debt holders, an "orderly bankruptcy" was thought to be the best option to restructure GM. On June 1st, General Motors filed for bankruptcy.
GM used Section 363 of the bankruptcy code which resulted in the creation of a 'New GM' with a healthy balance sheet, putting the new company on a clear path toward long-term viability and success.
On July 10th, just 40 days after entering bankruptcy court, the new GM was allowed to emerge from bankruptcy. The new GM will go with just four brands (Chevrolet, Cadillac, Buick and GMC), have significantly less debt, and a smaller workforce. At the onset, the new GM, General Motors Company will be owned by:
U.S. Department of the Treasury: 60.8 percent
UAW Retiree Medical Benefits Trust: 17.5 percent
Canada and Ontario governments: 11.7 percent
The old GM: 10 percent
There is currently no publicly traded security for the new GM. An IPO has been talked about for the 2nd half of 2010.
