GM Bankruptcy Seen as Tale of Best, Worst of Assets
May 29 (Bloomberg) -- When General Motors Corp. files for bankruptcy protection next week, a Dickensian tale of two legal processes will unfold.
In one, a judge will be told that a new entity will emerge within three months with prized assets and a plan to revisit the best of times when GM was the world’s largest carmaker. In the other, Bleak House comes to bankruptcy court as creditors shut out of the new entity will be told to argue for perhaps years about who gets company properties the new GM doesn’t want.
In the rosy scenario, the new company, armed with vehicles from GM’s Cadillac, Chevrolet, Buick and GMC divisions, plans to begin making money again within 60 to 90 days, while a bankruptcy court sells or liquidates unprofitable brands such as Saturn and Hummer. Saab already is in bankruptcy.
Chrysler LLC, GM’s smaller rival, is on schedule to create a similar new company even faster, stripped of billions in debt and stocked with viable vehicle models, with the approval of a bankruptcy judge in charge of its reorganization.
