According to an article in the Dallas Morning News, General Motors Corp., is asking a bankruptcy judge to approve its plan to restructure itself into a new automaker, mostly owned by the U.S. government.

Under the proposed bankruptcy plan, the old GM and its remaining assets will be liquidated and shareholders are expected to be wiped out. Also, some consumers who have claims against the bankrupt automaker may not be able to recoup any money.

The article said:

“If a person has a pending claim against the automaker for injuries sustained prior to June 1, or hasn’t filed suit yet for a past incident, they still will have to seek damages against the old company which is unlikely to have much left to pay claims. Under GM’s prior plan, the new company would have shed all of the past and future claims related to vehicles made by the old company, which is also what happened in the case of Chrysler, despite protests from consumer groups.”

This is a perfect example of how bankruptcy can give anyone (individual or business) a fresh financial start. Under the proposed bankruptcy plan, those seeking monetary claims against GM would need to get their money from the liquidated assets of the “old” GM not the new GM (the company with the most valuable assets).

Most likely those claimants will be in line behind other creditors and if they are luckily will receive a fraction of what they’re owed. If they are unlucky, they won’t get anything. The irony of it all is that while GM stood in the way of ordinary homeowners who wanted to modify their mortgages in bankruptcy, it is more than willing to take full advantage of the bankruptcy system to their benefit.