Via the NYT: Treasury Is Said to Warn G.M. of Bankruptcy Risk
The goal is to prepare for a fast “surgical” bankruptcy, the people who had been briefed on the plans said. G.M., which has been granted $13.4 billion in federal aid, insists that a quick restructuring is necessary so its image and sales are not damaged permanently.The preparations are aimed at assuring a G.M. bankruptcy filing is ready should the company be unable to reach agreement with bondholders to exchange roughly $28 billion in debt into equity in G.M. and with the United Automobile Workers union, which has balked at granting concessions without sacrifices from bondholders.
As I have noted before, something like this seems inevitable and at least plans are being made for a hopefully oredely process. Or, at least, as orderly as something like this can be.
But, of course, the taxpayer will still be on the hook:
The rest of G.M. may require as much as $70 billion in government financing, and possibly more to resolve the health care obligations and the liquidation of the factories, according to legal experts and federal officials.Sphere: Related Content
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April 13th, 2009 at 12:30 pm
[...] American taxpayers should not be too excited: The rest of G.M. may require as much as $70 billion in government financing, and possibly more to [...]