General Motors (GMGMQ) Hopes To Exit Bankruptcy Next Month

The Wall Street Journal is reporting that General Motors Corp. (OTC: GMGMQ) is looking for a quick exit out of bankruptcy. GM executives and advisers are hoping to exit bankruptcy court with the formation of a new company as early as mid-July.

However, GM's plan to emerge from Chapter 11 still faces obstacles, including challenges to its plan of reorganization. A bankruptcy judge is scheduled to hold a hearing June 30 on a proposed sale of the GM's assets.

The sale separates GM's more attractive assets, such as strong brands, from bad assets that are hurting GM. Bad assets will be sold off in a lengthy liquidation.

The plan is common in bankruptcy cases, but it could draw objections from others involved in the case who are owed money. Thousands of dealers, investors and others would stand to lose money or their businesses as a result of the plan.

One person told the WSJ that the the plan to exit that quick is "kind of presumptuous". "To get done by July 15 it would mean [the judge] has to handle all of the objections by July 1 and get the sale done by then. ...Can he count and dispense all of the objections by then?"

This person said, "It is possible, but no one can say for sure."

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