General Motors stood a critical step closer to ensuring its survival Monday after a bankruptcy judge approved what amounts to a government takeover of its operations in the United States and Canada, according to dpa. The deal could give GM the chance for a fresh start by allowing the ailing carmaker to sell its best brands and assets into a new company that is largely free of debt and propped up by billions of dollars in government loans. But the New York district court's decision was immediately appealed Monday by a group that is suing the company for personal injury claims, delaying GM's emergence from bankruptcy. The plan was also fought over three days of hearings last week by hundreds of dissatisfied creditors, car dealerships and some union workers who will lose benefits. The groups argued they got a poor deal from the government and hoped for more money in liquidation. Bankruptcy court Judge Robert Gerber, in an opinion late Sunday night, said nationalization was the only option for the largest US carmaker. He warned that liquidation would be devastating for the company and the car manufacturing community. "The only alternative to an immediate sale is liquidation a disastrous result for GM's creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates," Gerber wrote in his opinion. "Bankruptcy courts have the power to authorize sales of assets at a time when there still is value to preserve to prevent the death of the patient on the operating table," he wrote. Gerber noted that GM could not survive without some 30 billion dollars in government loans, which President Barack Obama's administration threatened to withdraw if the sale was not approved by July 10. The US government will get a 60-per-cent stake and the Canadian government a 12-per-cent share of the "New GM" company in exchange for the loans. A union health care trust will get 17.5 per cent and the bondholders 10 per cent to forgive some 27 billion dollars in company debt. The Detroit-based manufacturer entered bankruptcy on June 1 and went to court to seek what amounted to a government takeover. Gerber rejected challenges from about 850 different groups. GM is shedding a series of iconic brands in order to become viable again, including German subsidiary Opel, Swedish maker Saab and US brands Hummer, Saturn and Pontiac. US carmakers have been hit hard by the recession, which has sent sales plummeting more than 35 per cent since October. Last week, GM's smaller rival Chrysler restarted production at seven factories after emerging from bankruptcy earlier in June under the control of Italian manufacturer Fiat. The merger with Fiat spared Chrysler from a complete collapse, allowing it to shed loss-making brands and exit the bankruptcy process about three weeks ago. The US government has provided billions of dollars to both US carmakers in emergency loans.