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Live From The GM Bankruptcy Hearing

General Motors filed for bankruptcy protection this morning, marking the end of an era in the American automotive industry. Attorneys for GM will now push for court approval of a transaction that would allow for a quick sale of most of the automaker's assets to a "new GM" while shedding billions of dollars in liabilities. The case has been assigned to Robert E. Gerber, U.S. Bankruptcy Judge for the Southern District of New York, who has overseen cases involving such firms as the Adelphi cable company and telecommunications giant Global Crossing. The first hearing is scheduled for 4 p.m. today. Staff writer Tomoeh Murakami Tse is following the proceeding. You can read her posts here or on "the Ticker" Twitter.
  • The judge and attnys have gone over several key dates. Remember, sale hearing is set for June 30. That's just 29 days from now.
  • Hearing is over everybody!
  • We have gotten through all the agenda items. Amazing.
  • First day hearing is moving along at a very fast clip.
  • Several more motions regarding GMAC approved.
  • Please excuse the spelling errors everybody.
  • Interium DIP finanancing approved. The amount is $15 billion.
  • Judge says he forgot to approve interium sale procedure motion. Laughter. He approves it.
  • Judge praises the language as the "cleanest" he's seen in a while.
  • Now moving onto interim order sought by GM, to authorize the atomaker to use of cash collateral.
  • Attorney for one of the suppliers, Timkin, objects.
  • Lawyer for Canada speaks up in support of sale procedure motion.
  • Counselor for GM bondholders is objecting.
  • US government attny speaks up in favor of the sale and bidding procedures order. Time is of the essense, he says.
  • This motion isn't going to go forward without objections.
  • Now we are onto hearing comments on the motion to approve sales procedures.
  • It is approved.
  • It is a motion to establish procedures for resolving objections by utility companies and prohibiting them from discontinuing service.
  • We are now on motion number 18 of 24 scheduled for today.
  • Karotkin moves on to motion to pay taxes, another routine motion in bankruptcy.Judge says he hasnt seen such a motion not be granted.
  • Karotkin now asking for approval on motion to continue to pay insurance premium, which is granted.
  • Gm attny Karotkin back on podium. Asking for approval to pay foreign vendors. Approved.
  • Judge approves on an interium basis GM motion establishing global procedures for dealing with reclaimation claims.
  • The judge grants the warranty motion too.
  • There is no more critical time than now to reassure customers, Smolinsky says.
  • Smolinsky is moving on to GM’s motion to keep honoring prepetition obligations to customers and dealers like warranties.
  • Judge approves all three motions.
  • also on deck are motions to continue Troubled Supplier Assistance Program and continue participation in UST's Auto Supplier Support Program
  • Now we are moving onto a GM motion to on critical vendor payments.
  • Judge Gerber approves GM motion to keep paying its employees.
  • The judge is very mad. He says he will disconnect everyone if he hears another inappropriate joke. Everyone, mute your phones!
  • that person is admonished by the judge, who asks, "is someone cracking jokes at a serious hearing?"
  • someone listening in on an unmuted phone line cracks a joke: "but that doesnt cover private jets..."
  • Smolinsky says no incentive compensation will be paid out, and there will be no first class travel.
  • There is feedback from the speaker phone, another GM attny Joseph H. Smolinsky pauses.
  • Stephen Karotkin, Miller's partner at Weil, Gotshal & Manges, is now speaking.
  • The judge is now starting to approve a series of procedural motions filed by GM.
  • Miller of GM is asking the judge for a June 30 hearing on the motion to sell GM's assets to a new entity, majority owned by fed gvt.
  • Miller, GM's attny, asks Judge to approve interim DIP financing from UST of $15 billion while the automaker is in bankruptcy.
  • Consumer confidence is critical to a company like GM; it cannot survive a prolonged bankruptcy, Miller says.
  • Miller, the GM attny, is still at the podium. He is wearing a striped tie with a handkerchief peeking out of the breast pocket.
  • Henderson is wearing a pink tie.
  • GM ceo Fritz Henderson has his hands clasped in front of him as he listens to Miller detail GM's hardship of recent years.
  • As of March 31, GM recorded $82 billion in assets and $172 billion liabilities, miller says.
  • The bankruptcy affects only GM's U.S. operations that include 90,000 employees, 60,000 of whom are hourly, Miller says.
  • GM employes 235,000 people world wide as of March 31. Of that, 163,000 are hourly. 71,000 are salaried, Miller says.
  • The deteriorating economic conditions that began in spring &summer of last year expolded in the fall with Lehman's collapse,Miller says.
  • In fact, GM would have been terminated but for Dec 2008 agreement with US Treasury for a $13 billion loan, Miller says.
  • GM has been icon of auto industry. But has suffered for the last several years, Miller says.
  • The hearing may be a little ragged. People have been up for an extended period of time, Miller says.
  • Harvey Miller of Weil Gotshal is speaking. He is representing GM.
  • Judge Gerber is here.
  • GM Chief Exec Fritz Henderson is in the front row.
  • And there are large screens with several camera angles of the courtroom. And audio, of course.
  • The overflow room, by the way, is pretty nice. For one,unlike the courtroom, you can usually get a seat.
  • It's now 4:15 Colleagues from other media outlets familiar with Judge Gerber tell me he is not known to be on time. Great.
  • "All of you standing on the side, you're all going to speak? I don't believe you," the woman who made the annoucement says.
  • An announcement is made: everyone who is not speaking before the judge must leave. Now.
  • There are many familiar faces here in GM bankruptcy court. Lawyers and journalists from the Chrysler case are here.
  • General Motors filed for bankruptcy protection this morning, marking the end of an era in the Ame.. http://tinyurl.com/l6dfrq
  • Inside, it's standing room only. There are two overflow rooms. I've set up shop in the overflow room. The courtroom is way too hot and stuffy.
  • There was a long security line that snaked outside of the U.S. Bankruptcy Court here in Lower Manhattan. Camera crews are lined up.
  • Hi everyone, it's 10 minutes before GM's bankruptcy case is scheduled to go before Judge Robert Gerber.

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By Dan Beyers  |  June 1, 2009; 12:21 PM ET
Categories:  The Ticker  
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