A bankruptcy judge has ruled that General Motors Corp. can sell the bulk of its assets to a new company, potentially clearing the way for the automaker to quickly emerge from bankruptcy protection.
U.S. Judge Robert Gerber said in his 95-page ruling late Sunday that the sale was in the best interests of both GM and its creditors, whom he said would otherwise get nothing.
"As nobody can seriously dispute, the only alternative to an immediate sale is liquidation — a disastrous result for GM's creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates," Gerber wrote in his ruling.
Consumer groups have cautioned that people injured by a defective GM product before June 1, when the automaker filed for bankruptcy, would have to seek compensation from the "old GM," the collection of assets leftover from the sale, where they would be less likely to receive compensation.
Joanne Doroshow of the Center for Justice & Democracy said in a statement the issue "is far from over."
"It is morally reprehensible that GM will pay for injuries and deaths that occur after the bankruptcy process, but not for the hundreds of victims who have already been hurt by defective GM cars," Doroshow said.
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