The Work

July 1, 2009 3:37 PM

Live Blogging the GM Sales Hearing: "There Is No Alternative"

Posted by Zach Lowe

Harvey Miller, as expected, comes out firing, criticizing the "hundreds of objections" to the GM section 363 sales plan as those of creditors and other parties who simply want more money or want more time to get more money. 

Miller sums up the objections with two sentences: "I want more." And: "I need more time." Those objections aren't enough to derail the process, Miller says. 

"There can be no doubt," Miller says, that the bankruptcy code allows "old GM" to sell itself, with the approval of the court, to a consortium led by the U.S. Treasury, which will take a 60 percent stake in new GM. (The United Auto Workers and the Canadian government will get smaller stakes, and other bondholders will get approximately 10 percent of the equity in the new company. An ad hoc committee of small bondholders has protested the deal, saying they will have to accept pennies on the dollar while other unsecured creditors, such as the UAW, will get better deals.)

Miller says the survival of GM is at stake. "There are no other bidders," he says, and if the deal isn't done by July 10, the Treasury's deadline, the company will have to liquidate--an obvious disaster. "There is no other alternative," he says. 

Giving the bankruptcy process more time to unfold, as bondholder attorney Michael Richman just requested, would also deal a near-fatal blow to GM, Miller says, because "the assets are already so prone to deterioration and loss of value" as the case drags on. He brings up the specter of the Delphi Chapter 11, which is entering is about four years old. "GM is dependent on consumers," he says. "A GM in bankruptcy is also going to give rise" to consumer concerns about warranties and other issues. Consumer confidence "will disappear in any kind of extended Chapter 11 case."

Other tidbits from Miller's early remarks:

• He says 99.6 percent (approximately!) of GM dealers who have been offered spots in new GM have accepted them.

• Meanwhile, about 98 percent of those dealers GM has chosen to close have accepted wind-down agreements, Miller says.

Live Blogging the GM Sales Hearing

The Sales Hearing - 3:26 PM

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