Judge approves plan to liquidate old GM assets

AP News
Posted: Mar 03, 2011 7:24 PM
Judge approves plan to liquidate old GM assets

A federal judge said Thursday he will approve a plan to liquidate old General Motors Co. assets that the company shed in bankruptcy.

GM was split into two companies _ General Motors Co. and Motors Liquidation Co. _ when it emerged from bankruptcy protection in 2009. The new plan sells off and cleans up old assets, including 89 industrial sites in 14 states.

Judge Robert Gerber verbally approved the plan Thursday and said he will issue a written decision soon, according to Motors Liquidation. The hearing took place at the U.S. Bankruptcy Court in New York.

The plan creates four trusts to handle the work. An environmental trust will provide $536 million to clean up old sites. The money will come from the sale of property and equipment at those sites. In some cases, environmental remediation will continue for as long as 100 years, the company said.

A separate trust will distribute GM stock to some creditors. More than $275 billion in claims have been filed against GM since its bankruptcy, but the majority have been resolved. Motors Liquidation owns 10 percent of GM's common stock, or 150 million shares, plus warrants that can be exercised for 15 percent more. GM shares rose 15 cents to close at $33.03 Thursday.

Other trusts will handle asbestos claims and litigation-related claims.

Motors Liquidation said it has sold or secured sale agreements for 14 properties, including a Wilmington, Del., assembly plant that was sold to Fisker Automotive Inc. to produce hybrid vehicles, a Pontiac, Mich., plant that will become a movie studio, and a Strasbourg, France, plant that was sold back to GM.

GM spent six weeks in bankruptcy protection in the summer of 2009. When it emerged, it was 61-percent-owned by the government in exchange for $50 billion in government aid. The government's share was reduced to 33 percent after an initial public offering in November.

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