GM bankruptcy plan gains approval

GM is to be relaunched in July

A US judge has approved a bankruptcy plan for car giant GM, which allows the firm to transfer its profitable assets to a new government-backed firm.

Judge Robert Gerbert gave the plan the go-ahead late on Sunday, saying the sale would prevent "the death of the patient on the operating table".

GM filed for bankruptcy protection on 1 June, saying it would be forced to liquidate if the plan was not approved.

The new streamlined General Motors will be 60% owned by the US government.

The bankruptcy plan had been opposed by several groups - including some of GM's bondholders, unions and consumer groups - who had argued that their needs were being ignored in favour of the interests of the carmaker and the government.

But Judge Gerbert argued that the 850 objections were not valid.

In a 96-page opinion, he said: "If GM liquidates, there will not only be nothing for stockholders - there will be nothing for unsecured creditors."

This would be a "disastrous result", he added.

Source : BBC