GM bankruptcy judge allows immediate access to funds

Within hours of GM’s bankruptcy filing, the judge in the case gave approval for the company to access about half of the debtor-in-possession financing being offered by the American and Canadian governments to help the company survive through the restructuring process. Automotive News reports:

U.S. Bankruptcy Judge Robert Gerber today approved interim bankruptcy financing of $15 billion until the court can act on a GM request for total debtor-in-possession financing of $33.3 billion.

Of the $33.3 billion, the U.S. Treasury has committed to provide $30.1 billion and the governments of Canada and Ontario also are making contributions.

The bankruptcy financing will allow GM to operate in Chapter 11 protection, with possible emergence within the next 60-90 days.

It looks as though the bankruptcy court is going to be intent on doing what is necessary for GM to survive the restructuring process. The judge also approved a motion to authorize payment to suppliers for parts already delivered, which will help those suppliers survive the shutdown over the next few weeks, and a motion to authorize the company to continue paying incentives to dealers, which will help dealerships continue to sell cars.