DETROIT — The path is now clear for General Motors Corp. to leave bankruptcy protection in record time as a leaner company that is better equipped to compete in a brutal global auto market.
On Thursday, a judge’s order allowing GM to sell most of its assets to a new company went into effect, despite a last-minute appeal by plaintiffs in a product liability case.
GM spokeswoman Julie Gibson said U.S. Bankruptcy Judge Robert Gerber’s order became effective at noon EDT. GM lawyers are working on paperwork to close the sale as quickly as possible, after which GM would leave bankruptcy protection.
GM CEO Fritz Henderson will hold a news conference in Detroit Friday morning to explain executive cuts, management changes and the company’s plan to make money by emphasizing quality and fuel economy. He will be joined by Edward Whitacre Jr., who will lead the board of GM.
Once the world’s largest and most powerful automaker, the “new GM” will become government-owned, but leaner and greener, cleansed of debts and burdensome contracts that nearly dragged it into liquidation. But the new company faces tough international competition and the worst auto sales market in more than 25 years.
John Pottow, a University of Michigan Law School professor who specializes in bankruptcy, said opponents of the sale had little legal recourse to block it because their issues were shot down by higher courts in Chrysler’s bankruptcy case.
“It’s done,” Pottow said. “I knew they were dead as soon as the Chrysler case was decided.”
He expects GM to close the deal and emerge from bankruptcy on Thursday in 39 days, a record for a company its size, he said.