GM awaits US ruling on sale plans

GM wants to sell its best assets

A new General Motors could emerge from bankruptcy protection soon if a US judge approves its plans to sell assets to a company owned by the government.

On Thursday, Judge Robert Gerber asked lawyers to submit papers to him by Friday. He is expected to make a ruling on the carmaker by 10 July.

Dissenting bondholders have called on the judge to block the sale.

But lawyers for General Motors said failure to approve the sale would be "catastrophic" for the firm.

The US government has indicated that it will not fund the car giant after 10 July, increasing pressure for a decision before then.

Under GM's proposed deal, the carmaker would sell its best assets to a new company owned by the US government. It would have a smaller workforce and much less debt. The US Treasury would provide $60bn (£36.6bn) in financing to the new company and would take a 60% stake.

Earlier this week, GM's chief executive Fritz Henderson, and Harry Wilson, a senior member of the government's auto task force, told the court that the sale was the company's only option for survival.

But some bondholders want the company to restructure itself under bankruptcy protection, in the belief that they would be able to strike a better deal for their debt than if the assets are sold to the government.

They argue that the government is unlikely to cut off funding to GM if the sale is not approved.