UPDATE 1-Way cleared for GM bankruptcy filing in New York

* GM expected to file in Manhattan Monday

* Filing by GM-owned dealership paves the way (Adds details from filing)

NEW YORK, June 1 (Reuters) - A General Motors Corp-owned (GM.N) dealership filed for Chapter 11 bankruptcy protection in New York City early on Monday, giving the ailing car maker an opening for a companywide bankruptcy filing in federal court in Manhattan.

GM is expected to file on Monday. Manhattan is favored as a venue in major bankruptcy cases for its proximity to the nation's top law firms and the experience of its judges.

Having an affiliate with a pending case in the Southern District of New York gives GM the ability to file in that court.

The GM dealership, Chevrolet-Saturn of Harlem Inc, listed assets and liabilities of "more than $1 billion" each. The largest creditors included Wilmington Trust Co WL.N, with $22.76 billion in bond debt, and GM's United Auto Workers union, with $20.56 billion in employee obligations, according to court documents.

The dealership's filing was submitted by law firm Weil, Gotshal & Manges LLP.

The case is In re Chevrolet-Saturn of Harlem Inc, U.S. Bankruptcy Court, Southern District of New York (Manhattan), No. 09-13558. (Reporting by Chelsea Emery, Santosh Nadgir, Phil Wahba; Editing by Lisa Von Ahn and John Wallace)