General Motors files for Chapter 11 bankruptcy

General Motors, the world’s largest automaker until recently, has officially filed for bankruptcy. As its fate was known for months, it finally happened as GM filed for Chapter 11 bankruptcy protection on June 1, 2009 in a New York court, declaring $82 billion in assets and $172 billion in debts.

The century-old company will gain assistance from the U.S. government. The Obama administration will give a further $30 billion in financing to GM, after the automaker has already received over $19 billion. Bankruptcy proceedings will see the company’s assets split into “Good GM” and “Bad GM,” the latter of which will be liquidated.

The U.S government gets a 60% share of the company, supposedly acting like a silent partner, but will still be involved in large decisions, such as selecting the company’s board of directors and major corporate transactions. While this may not equate to day-to-day management decisions, the government will surely have the ability to influence company plans through appointments and such decision-making processes.

GM says all warranties would be honored for existing customers.

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