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General Motors Chapter 11 reorganization
| Date | 2009 |
|---|---|
| Location | U.S. |
| Cause | Bankruptcy |
| Motive | 2008 automotive crisis |
| Organised by | U.S. bankruptcy court |
| Verdict | Sale of General Motors subsidiaries and assets |
The 2009 General Motors Chapter 11 sale of the assets of automobile manufacturer General Motors and some of its subsidiaries was implemented through Chapter 11, Title 11, United States Code in the United States bankruptcy court for the Southern District of New York. The United States government-endorsed sale enabled the NGMCO Inc.[1] ("New GM") to purchase the continuing operational assets of the old GM.[2][3][4] Normal operations, including employee compensation, warranties, and other customer services were uninterrupted during the bankruptcy proceedings.[2] Operations outside of the United States were not included in the court filing.[2]
The company received $33 billion in debtor-in-possession financing to complete the process.[5] GM filed for Chapter 11 reorganization in the Manhattan New York federal bankruptcy court on June 1, 2009, at approximately 8:00 am EDT. June 1, 2009, was the deadline to supply an acceptable viability plan to the U.S. Treasury. The filing reported US$82.29 billion in assets and US$172.81 billion in debt.[6][7][8][9][10]
After the Chapter 11 filing, effective Monday, June 8, 2009, GM was removed from the Dow Jones Industrial Average and replaced by Cisco Systems. From Tuesday June 2, old GM stock has traded Over the Counter (Pink Sheets/OTCBB), initially under the symbol GMGMQ[11] and subsequently under the symbol MTLQQ.
On July 10, 2009, a new entity completed the purchase of continuing operations, assets and trademarks of GM as a part of the 'pre-packaged' Chapter 11 reorganization.[12][13] As ranked by total assets, GM's bankruptcy marks one of the largest corporate Chapter 11 bankruptcies in U.S. history. The Chapter 11 filing was the fourth-largest in U.S. history, following Lehman Brothers, Washington Mutual and WorldCom.[14] A new entity with the backing of the United States Treasury was formed to acquire profitable assets, under section 363 of the Bankruptcy Code, with the new company planning to issue an initial public offering (IPO) of stock in 2010.[15] The remaining pre-petition creditors claims are paid from the former corporation's assets.[12][15]
- ^ GM 363 Asset Sale Approved by U.S. Bankruptcy Court July 6, 2009. Accessed September 8, 2012.
- ^ a b c Cite error: The named reference
GM Bankruptcy Press Release-2009-06-01was invoked but never defined (see the help page). - ^ Cite error: The named reference
Pleading-Sale to VAH LLC-2009-06-01was invoked but never defined (see the help page). - ^ Cite error: The named reference
Business Week-AP-Beck-2009-06-02was invoked but never defined (see the help page). - ^ G.M. Wins Final Approval of DIP Financing
- ^ "The 10 largest U.S. bankruptcies". CNNMoney.com. Cable News Network. June 1, 2009. p. General Motors. Retrieved June 2, 2009.
- ^ Sandler, Linda; Chris Scinta; Bob Van Voris; Jeff Green (June 1, 2009). "GM Files Bankruptcy to Spin Off More Competitive Firm (Update4)". Bloomberg.com. Bloomberg LP. Retrieved June 1, 2009.
- ^ Sanger, David E.; Jeff Zeleny; Bill Vlasic (May 31, 2009). "G.M. to Seek Bankruptcy and a New Start: A Risky Bet to Save an Icon of American Capitalism". The New York Times. Retrieved June 1, 2009.
- ^ Sanger, David E. (May 31, 2009). "G.M. to Seek Bankruptcy and a New Start". The New York Times. Retrieved June 1, 2009.
- ^ Maynard, Micheline (May 29, 2009). "After 93 Years, G.M. Shares Go Out on a Low Note". The New York Times. Retrieved June 1, 2009.
- ^ "Worthless GM stock will keep trading, but not on NYSE". Los Angeles Times. June 1, 2009. Retrieved July 10, 2009.
- ^ a b Stoll, John D., and Neil King Jr. (July 10, 2009).GM Emerges From Bankruptcy.The Wall Street Journal. Retrieved on July 10, 2009.
- ^ "Obama: GM bankruptcy viable, achievable - Autos- NBC News". NBC News. May 31, 2009. Retrieved June 1, 2009.
- ^ Tkaczyk, Christopher (June 1, 2009). "The 10 Largest U.S. Bankruptcies: From Lehman to Texaco, the Mighty Have Fallen, Taking Down Billions and Billions with Them". money.cnn.com. Fortune. Retrieved June 1, 2009.
- ^ a b Stoll, John D., and David McLaughlin (July 2, 2009).General Motors Aims for IPO Next Year.The Wall Street Journal. Retrieved on July 10, 2009.
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