GM bankruptcy will face same hurdles as Chrysler deal

A finalized General Motors bankruptcy will still have to clear the hurdles that faced Chrysler after an appeal to a federal judge’s approval of GM’s bankruptcy was filed Monday.

A notice of appeal on behalf of consumer advocates was filed against a judge’s decision last night to okay the sale of old GM assets to a new, government-backed GM, the Detroit Free Press reported.

The consumer advocates claim that the prestructured bankruptcy would water down the ability of accident victims to make claims against the company.

The holdup on closing the deal mirrors the claims made against Chrysler, though a federal circuit court upheld the Chrysler deal, and the Supreme Court refused to take up the case — only after a temporary stay was issued by Justice Ruth Bader Ginsburg.

While the GM bankruptcy is significantly larger in scale, the Supreme Court signaled a disinclination to disrupt the carefully engineered deals assembled by the troubled automakers and the Obama administration.