GM creditors will let asset sale go forward while they appeal

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: General Motors Corp’s sale of most of its assets to a US Treasury-funded buyer won’t be stalled by the only appeal of a decision approving the transaction, a lawyer for objecting creditors said.

Steven Jakubowski, a lawyer for creditors appealing a July 5 ruling, said he won’t seek a stay blocking the sale while the appeal is being considered. His clients are people with accident-related claims involving GM vehicles. Jakubowski said the new company should take responsibility for claims that predate the sale.

US Bankruptcy Judge Robert Gerber, who approved the sale, said it was the only option available to the bankrupt Detroit- based automaker, which filed for court protection June 1. The appeal should go directly to a federal appeals court, Jakubowski said.

“This is a matter of public importance,” Jakubowski, an attorney with the Coleman Law Firm in Chicago, said in a phone interview on why he appealed yesterday.

Gerber stayed his order through noon New York time July 9 to give opponents a chance to appeal. GM asked that the order to be made effective immediately. The Unofficial Committee of Family & Dissident GM Bondholders said in an e-mailed statement from their lawyer Michael Richman that it doesn’t plan to appeal the sale due to the potential cost. “The committee members on Tuesday simply lack the resources needed to mount an effective appeals process on the accelerated basis that would be required here,” chairman Hal John said. The group of three investors said they were representing as many as 2,000 others who own as much as $500 million of GM debt. Richman of Patton Boggs LLP had argued Gerber should call the Obama administration’s bluff that it would let GM liquidate if the sale weren’t approved. He wanted Gerber to force the automaker to file a complete reorganization plan on which creditors could vote.

GM’s lawyer Stephen Karotkin, of Weil, Gotshal & Manges LLP, said that barring a further stay the sale will “close promptly,” a comment repeated by GM Chief Executive Officer Fritz Henderson on a company blog.

The company will have a “leaner and meaner” management after the sale closes, said Steven Rattner, the Treasury’s chief auto adviser. The new GM will be a smaller company than it was and somewhat less global so it will be natural for the management structure to change, Rattner said yesterday during a conference call.