GM’s CEO is grilled in court

Questioned over plan to sell to a ‘new’ company

A sign outside the General Motors Ellington-Brim Chevrolet dealership in Creedmoor, N.C., last week. A sign outside the General Motors Ellington-Brim Chevrolet dealership in Creedmoor, N.C., last week. (Jim R. Bounds/ Bloomberg News)
By Bree Fowler
Associated Press / July 1, 2009
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NEW YORK - General Motors CEO Fritz Henderson defended the automaker’s plan yesterday to sell the bulk of its assets to a new company and quickly emerge from bankruptcy protection.

General Motors Corp., whose June 1 filing for bankruptcy protection was the fourth-largest in US history, is hoping to avoid a lengthy sale hearing that could postpone its emergence from Chapter 11. Last month, objections from a group of bondholders and others dragged out rival Chrysler LLC’s sale hearing for three days.

At a packed Manhattan courthouse yesterday, Henderson was questioned for about five hours by attorneys for the various parties challenging the sale, including bondholders, consumer groups, and unions.

Henderson said the No. 1 US-automaker’s sale plan is necessary to get GM back on its feet quickly and cautioned that the government could walk away from the deal if the sale doesn’t close by July 10.

Despite US Judge Robert Gerber’s urging for the attorneys to keep their arguments concise, the hearing dragged on as a parade of lawyers made their way up to the podium to question Henderson.

“I think people have forgot why we’re here and what we have to accomplish,’’ Gerber said sharply after several tedious hours of testimony.

Gerber appeared particularly annoyed when Henderson and other officials were questioned by Oliver Addison Parker, an attorney from Florida who said he owns $5 million in GM bonds. Parker spent much of his time at the lectern searching for documents, at times asking opposing counsel to provide them, prompting Gerber to put his head in his hands.

“I don’t think it’s fair to ask the others and the court to fetch for you,’’ Gerber said tersely while Parker was cross examining Albert Koch, GM’s chief restructuring officer.

In addition, J. Stephen Worth, one of GM’s restructuring advisers for the past year, also testified yesterday. The hearing was scheduled to start up again early today.