[6][7][8][9][10] After the Chapter 11 filing, effective Monday, June 8, 2009, GM was removed from the Dow Jones Industrial Average and replaced by Cisco Systems.
[14] A new entity with the backing of the United States Treasury was formed to acquire profitable assets, under section 363 of the Bankruptcy Code, with the new company planning to issue an initial public offering (IPO) of stock in 2010.
[17] In 2006, its attempts to obtain U.S. government financing to support its pension liabilities and also to form commercial alliances with Nissan and Renault failed.
[19] On November 7, 2008, General Motors reported it had projected it would run out of cash around mid-2009 without a combination of government funding, a merger, or sales of assets.
[22] Congress declined to act, but in December 2008 the Bush administration provided a "bridge loan" to General Motors with the requirement of a revised business plan.
Mr. Wagoner met with President Obama’s auto task force, and the company said that it could not survive much longer without additional government loans.
On the March 30, 2009 deadline, President Barack Obama declined to provide financial aid to General Motors, and requested that General Motors produce credible plans, saying that the company's proposals had avoided tough decisions, and that Chapter 11 bankruptcy appeared the most promising way to reduce its debts, by allowing the courts to compel bondholders and trade unions into settlements.
[27] Efforts to sell General Motors' European operations ran into difficulties, as the corporation was expected to file for bankruptcy protection by June 1, 2009.
[43] In a press conference later that day, the GM Chief Executive Officer, Fritz Henderson, stressed that he intended for the bankruptcy process to move quickly.
[44] In addition to Mr Henderson's press conference, President of the United States Barack Obama made a speech from the White House after the court filing.
The United States Treasury argued in court that it was the only source of such debtor in possession funding, and that without the money from the loan General Motors would have no option but liquidation.
On October 9, they reached an agreement to sell their entire stake in the Hummer brand to China-based Sichuan Tengzhong Heavy Industrial Machinery Company Ltd.[51] and a group of private investors (Mr. Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong-listed thenardite producer Lumena, would have held the remaining 20 percent stake.)
On June 16, 2009, it was announced that the Swedish firm Koenigsegg Automotive AB and a group of Norwegian investors planned to acquire the Saab brand from General Motors.
[2] On July 10, 2009, after an auction process and approval by Judge Gerber concluded, GM's continuing operational assets and trademarks were transferred to the sole bidder, a primarily government-owned entity called "NGMCO Inc.",[60] which upon sale assumed the name General Motors Company.
Under the reorganization process, termed a 363 sale (for Section 363 which is located in Title 11, Chapter 3, Subchapter IV of the United States Code, a part of the Bankruptcy Code), the purchaser of the assets of a company in bankruptcy proceedings is able to obtain approval for the purchase from the court prior to the submission of a re-organization plan, free of liens and other claims.
[64][65][66][67] As ranked by total assets, the Chapter 11 reorganization of "new GM" from the old is one of the largest successful corporate reorganizations in U.S. history, and the fourth-largest bankruptcy in U.S. history by total assets, following Lehman Brothers Holdings Inc., Washington Mutual and WorldCom Inc.[14] The same day, GM reported 88,000 U.S. employees, and announced plans to reduce its U.S. workforce to 68,000 by the end of 2009.
[72] The company's familiar square blue "badge" was removed from its website and advertising, in favor of a new, subtle all-text logo treatment.
[70] October 10, 2008: GM considered exchanging its remaining 49% stake in GMAC to Cerberus Capital Management for Chrysler LLC, potentially merging two of Detroit's "Big Three" automakers.
[73] Acquisition talks involving Chrysler were cancelled, however, before November 7, 2008, as part of a broader response to the increasing urgency of GM's own cash flow problems.
The U.S. Senate voted and strongly opposed any source of government assistance through a bailout bridge loan (originally worth $14 billion in emergency aid) which was aimed toward helping the struggling Big Three automakers financially, despite strong support from President George W. Bush and President-elect Barack Obama, along with some mild support from the Democratic and Republican political parties.
Chrysler LLC, which is owned by Cerberus Capital Management, in a similar financial situation, warned that it, too, was nearly out of cash and might not survive much longer.
December 18, 2008: President Bush announced that an "orderly" bankruptcy was one option being considered for both General Motors and Cerberus-owned Chrysler LLC.
As of February 14, 2009: General Motors was considering filing for Chapter 11 bankruptcy under a plan that would assemble all of their viable assets, including some U.S. brands and international operations, into a new company.
[77] A qualified going concern audit letter like this is only issued by the auditors when the company is in extreme financial distress and it is likely that it may file for bankruptcy protection.
[79] March 29, 2009: GM's Chairman and CEO, Rick Wagoner, agreed to immediately resign his position as part of an Obama administration automotive restructuring plan.
[80] In announcing that plan, on March 30, 2009, President Obama stated that both GM and Chrysler may need to use "our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger".
March 31, 2009: President Barack Obama announced that he would give GM 60 additional days to try and restructure their company and prove their viability.
[87] July 10, 2009: A new company financed by the United States Treasury, "NGMCO Inc"[1] purchased most of the assets, and the trademarks of the General Motors Corporation.
[96][97] A study by the Center for Automotive Research found that the GM bailout saved 1.2 million jobs and preserved $34.9 billion in tax revenue.
The deal, of which Judge Robert Gerber says he was unaware despite its disclosure in an SEC filing on the day GM sought Chapter 11 protection, could prompt at the time a reopening of the 2009 case.