No it didn't. The administration put together an "extra-legal" deal to restructure GM without resorting to bankruptcy. Extra legal because although bankruptcy law is... law, the restructuring deal short circuited bankruptcy court, which the administration wanted to avoid since a bankruptcy judge could have thrown out all of the union contracts. They did a lot of hinky stuff with that deal. The law can be so bothersome sometimes!
OH NO! Not more conspiracy theories!
http://www.huffingtonpost.com/2009/06/01/gm-bankruptcy-begins-ny-d_n_209605.htmlNEW YORK — General Motors entered Chapter 11 bankruptcy protection Monday with a near-complete plan to quickly emerge and potentially become profitable again, having already nailed down deals with its union and bondholders and arranged to sell off brands and most of its Opel operations in Europe.
GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.
"The General Motors board of directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many," GM Chairman Kent Kresa said in a written statement. "Today marks a new beginning for General Motors. ... The board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world."
As it reorganizes, the fallen icon of American industry will rely on $30 billion of additional financial assistance from the Treasury Department and $9.5 billion from Canada. That's on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.
Late Monday, U.S. Judge Robert Gerber gave interim approval for the Detroit-based automaker's use of a total of $33.3 billion in government bankruptcy financing, with $15 billion available for use over the next three weeks. He will rule on final approval of the financing on June 25.
The judge also set GM's sale hearing for June 30, putting the automaker on a path similar to that of rival Chrysler LLC, which held its sale hearing about 30 days after filing for Chapter 11. Objections in GM's case are due on June 19, with any competing bids required to be submitted by June 22.
"Our agreement with the U.S. Treasury and the governments of Canada and Ontario will create a leaner, quicker more customer and completely product-focused company, one that's more cost competitive and has a competitive balance sheet," CEO Fritz Henderson said at a news conference in New York. "This new GM will be built from the strongest parts of our business, including our best brands and products."
The Detroit automaker said warranty coverage, service and customer support will continue uninterrupted, plants will continue to make cars and trucks, and essential suppliers and GM's 235,000 employees worldwide will continue to be paid. GMAC Financial Services said in a statement that it will continues to provide automotive financing to GM and Chrysler dealers and customers, and the federal Pension Benefit Guaranty Corp. said workers' pension plans remain safe.
GM will follow a similar course taken by smaller rival Chrysler, which filed for Chapter 11 protection April 30. A judge on Sunday gave Chrysler approval to sell most of its assets to Italy's Fiat, moving the U.S. automaker closer to a quick exit from court protection, possibly this week.
