Its management remains in control during the period of Chapter 11 but the important thing is that it gives the company “automatic stay” and “breathing room” to put its house in order by not allowing parties to take legal action or take away its assets (http://www.gmreinvention.com).
General Motors was originally founded on September 16, 1908 as a holding company for Buick by two partners, William C. Durant and Charles S. Mott. Two years later or around 1910, Durant lost control of General Motors because of a default in its bank loan obligations. However, he was able to regain control through a proxy war he waged by using the Chevrolet Motor Car Company to acquire shares secretly but then he lost control again when the vehicle market collapsed during the Great Depression. General Motors Corporation was part of the so called three generals in American business – the other two being General Electric and General Mills. Years of mismanagement and a bureaucratic corporate culture led to its collapse in the last financial crisis and is now owned by the US government through its Treasury Department under the Troubled Asset Relief Program (TARP); it was overtaken by Toyota last year.
After its restructuring under Chapter 11 rules, it is now a limited liability company. It means being an LLC, it provides limited liability to its owners which are the US government and to a lesser extent, also the Canadian government. Other present owners include the United Auto Workers Union Employee Association and various bondholders of Motors Liquidation Corporation (the new name of General Motors while it is undergoing rehabilitation at present) while the previous stockholders of the company are now holding worthless pieces of paper as company liabilities are much greater than its total assets (a negative net-worth of $86 billion). Before the restructuring, it was a