GM files for bankruptcy; Chrysler closer to getting out of bankruptcy

NEW YORK (AP) – NEW YORK (AP) - General Motors has filed for bankruptcy protection as part of an Obama administration plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government.

The fallen icon of American industrial might filed its Chapter 11 petition in New York today. It marks the fourth-largest bankruptcy in U.S. history and the largest for an industrial company.

GM's reorganization plan will rely on up to $30 billion of additional financial assistance from the Treasury Department. That's on top of the $19.4 billion in taxpayer money GM already has received in the form of low-interest loans.

In the meantime, a federal bankruptcy judge late Sunday approved the sale of most
of Chrysler's assets to Italy's Fiat. That moves the American automaker a step closer to its goal of a quick exit from court protection.

Judge Arthur Gonzalez said in his ruling that a speedy sale is needed to keep the value of Chrysler from deteriorating and would provide a better return for the company's stakeholders.

The sale is the centerpiece of a restructuring plan backed by President Barack Obama's automotive task force.

A trio of Indiana state pension and constructions funds, which own some of Chrysler's $6.9 billion in secured debt, aggressively objected.

Their attorneys have said they would appeal if Gonzalez approved the sale.