This Day In Market History: General Motors Sells Commercial Mortgage Business

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened? On Mach 23, 2006, General Motors Company GM sold the controlling interest in its commercial mortgage business for $8.8 billion.

Where The Market Was: The Dow finished the day at 11,270.29. The S&P 500 finished at 1,301.67.

What Else Was Going On In The World? In 2006, European newspapers faced backlash from the Muslim community after several publications printed a cartoon depicting the Prophet Muhammad. Saddam Hussein was found guilty of crimes against humanity and sentenced to death. The price of a postage stamp was 39 cents.

GM Desperately Tries To Avoid Bankruptcy: Prior to the mortgage crisis, GM was forced to dump a 78% ownership stake in GMAC Commercial Holding to a group of five investors, including Kohlberg Kravis Roberts & Company, Five Mile Capital Partners and Goldman Sachs Capital Partners.

GM had found itself in a major cash crunch, and the sale of its commercial business came just one day after it offered its United Auto Workers union employees buyouts if they would agree to leave the company. GM reported a $10.6-billion loss in 2005.

Two years later in 2008, GM announced it was cutting costs by $10 billion and raising another $5 billion via additional asset sales. By December 2008, GM was asking the government for up to $18 billion in aid. The company reported a net loss of $30.9 billion in 2008 and filed for bankruptcy on June 1, 2009.