[JURIST] A federal bankruptcy judge on Thursday approved [press release] a motion [text, PDF] to allow General Motors (GM) [corporate website] to borrow $33.3 billion in debtor in possession financing from the US and Canadian governments to finance a new company. Judge Robert Gerber quickly approved the motion [NYT report], allowing the proceedings [case materials] to continue without delay. The motion, which also argues to the sale of GM's assets, contends that the new company, referred to as the "New GM" in court documents, will be a "lynchpin of the domestic automotive industry" and will allow the US to resume being one of the leading automotive manufacturers in the world. The company stressed the importance of the sale in the motion:

The proposed sale is the only viable alternative that will permit the realization of the going concern value of the assets to be sold and effect the transformation of the Purchased Assets to be the foundation for an efficient, productive, and economically viable business that will be competitive and a source of pride and employment for hundreds of thousands of workers. At the same time, it will avoid systemic failure in the automotive industry and other sectors of the economy as well as offer hope for thousands of other businesses and their employees that supply or otherwise are dependent upon the Company, together with the countless communities in which those businesses and their employees are located.

A hearing on the motion for GM's final asset sale planned to be held on June 30 and several interested parties have filed objections.

GM initially filed for Chapter 11 bankruptcy protection [JURIST report] on June 1, asking the court to approve measures [press release] that would provide for a smooth transition to the "New GM," including a request for the US and Canadian governments to back existing warranties. The other members of Detroit's "Big Three" automakers have also faced financial troubles recently. Chrysler filed for bankruptcy protection [case materials] in April after failing to negotiate the return of $6.9 billion in debt for $2 billion in cash with secured debt holders. Earlier this month, Judge Arthur Gonzales approved [JURIST report] the sale of most of the assets currently held by Chrysler Group to Italian automaker Fiat S.p.A. [corporate websites]. Ford Motor Company [corporate website] is seeking to regain lost market share [WSJ report] while its domestic rivals are involved in bankruptcy proceedings.