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38 U.s. States Form Committee To Oppose Gm’s Sale To Government

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U.S. States Form Committee to Oppose GM’s Sale to Government

By Linda Sandler and Christopher Scinta

June 26 (Bloomberg) -- Nebraska and at least 37 other states formed a committee to oppose General Motors Corp.’s planned sale of assets to a company controlled by the U.S. government, according to a court filing today.

The states have said they oppose GM’s use of bankruptcy law to annul contracts with unwanted auto dealers. Their informal, or ad hoc committee may call witnesses at the hearing on GM’s sale set for June 30, including GM Chief Executive Officer Frederick Henderson and Harry Wilson of the Auto Task Force, the group said in today’s filing.

Detroit-based GM filed for bankruptcy on June 1 after failing to reorganize outside of court, reporting debt of $172.8 billion, more than twice its assets. Wilson said in a court filing this week that a swift sale of its most valuable assets to U.S. Treasury-funded Vehicle Acquisition Holdings LLC is needed to help avoid a “catastrophic and expensive meltdown in GM auto sales.â€

GM also faces objections to the sale from bondholders, consumers and steelworkers.

The case is In re General Motors Corp., 09-50026, U.S. Bankruptcy Court, Southern District, New York (Manhattan).

To contact the reporters on this story: Linda Sandler in New Yorkt ; Christopher Scinta in U.S. Bankruptcy Court in New York at cscinta@bloomberg.net.

Last Updated: June 26, 2009 16:53 EDT

http://www.bloomberg.com/apps/news?pid=206...id=agRZMhHK5WoY

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