GM awaits judge's decision

by Hu Guangyao

CHICAGO, July 2 (Xinhua) -- The largest U.S. automaker GM could soon learn whether it will emerge as a new, largely debt-free company as lawyers at a New York based bankruptcy court finished Thursday closing arguments in GM's asset sale hearing.

According to local media reports, a lawyer representing GM's small bondholders Thursday urged a judge to call the government's bluff that it will stop funding the automaker's restructuring if a sale is not approved by July 10.

The lawyer, Michael Richman, objects to GM using Section 363 of the Chapter 11 bankruptcy code to try to divide its assets and sell the best to form a new GM. The bad assets would remain in court as part of the old GM and be liquidated, leaving many creditors with lawsuits, claims and benefits left behind in bankruptcy court.

His testimony began the third day of GM's asset sale hearing in front of U.S. Bankruptcy Judge Robert Gerber.

Creditors, who have objected to the sale of GM's good asset to the U.S. government and speedy emergence of GM from bankruptcy court, are delivering closing arguments Thursday morning.

Richman also dismissed arguments from GM President and CEO Fritz Henderson and others that the automaker's best assets are jeopardized by a prolonged stay in bankruptcy court.

He urged Gerber to reject the sale, saying GM could still restructure in an accelerated, traditional Chapter 11 case.

The objectors are endangering thousands of jobs, the welfare of communities that rely on GM and imperiling the automaker's assets by betting the government is lying about its intention to pull its funding, the automaker's lawyer Harvey Miller said.