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Much like in Chrysler LLC, where a group of Indiana state pension funds sought to appeal the automaker's court-approved sale to Fiat SpA, a group of GM product liability claimants on Tuesday filed a motion with the U.S. Bankruptcy Court for the Southern District of New York asking that their appeal of Judge Robert Gerber's July 5 sale order be fast-tracked to the appeals Court, skipping district court. A group of asbestos claimants likewise sought to appeal Gerber's approval of the sale on Tuesday, but to a district court. Gerber refused both motions on Tuesday. In a 17-page opinion, the judge said he denied the request to stay his order approving the sale because he saw no "substantial possibility" that the groups would prevail at the 2nd Circuit, "given that Circuit's affirmance [sic] of the Chrysler judgment." (A three-judge panel of the U.S. Court of Appeals for the 2nd Circuit on June 5 affirmed a ruling by Gerber's colleague on the Manhattan bench, Judge Arthur Gonzalez, who approved Chrysler's sale to Fiat on May 31.) GM is using the bankruptcy court to sell a majority
of its "good" assets -- including the Cadillac, Buick, GMC and Chevrolet
brands -- while leaving certain liabilities and less profitable assets
such as the Saturn and Pontiac brands behind to be sold or liquidated
for the benefit of creditors. The liabilities GM is leaving behind
in bankruptcy include product liability claims for vehicles sold before
its June 1 bankruptcy filing and asbestos liability claims. GM
estimates that over 10 years it will book a $650 million liability for
such claims. Just as he routinely did in his 87-page decision approving GM's sale to Treasury, Gerber noted that the federal government would stop funding GM's bankruptcy if the sale were not approved by July 10. Treasury is leading a $33.3 billion DIP. "We
simply don't have the luxury of letting GM languish in bankruptcy while
an appellate court considers the issues the tort litigants and asbestos
litigants want to raise," Gerber wrote. Gerber wrote: Even
as I once more note my sympathy for asbestos victims, granting a stay
on this showing (or lack of showing), at the expense of all of those
other interests -- and, especially, without the bond that would be
necessary to give them the slightest semblance of compensation -- would be
unconscionable. - John Blakeley For more about Judge Gerber, see The Deal magazine
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General Motors Corp. remains
on track to sell a majority of its assets to a U.S. Department of the
Treasury-sponsored purchaser by Friday after a Manhattan judge late
Tuesday denied motions to halt the sale and appeal directly to
the 2nd Circuit Court of Appeals. 
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