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GM Aims for Fastest Possible Bankruptcy
Treasury directed GM to prep for Chapter 11 as options dwindle
By Clay Dillow
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Posted Apr 13, 09 7:40 AM CDT
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(Newser)
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General Motors is in high gear, the New York Times reports, prepping for a possible bankruptcy that would allow the company to reorganize and emerge from protection in as little as 2 weeks. Since the Treasury Department instructed the automaker to prepare for a bankruptcy filing by June 1, in case other options for reorganization don't work out, the focus has been on a quick turnaround, so that the company's image and sales are damaged as little as possible.
“If we need to resort to bankruptcy, we have to do it quickly,” GM's new CEO Fritz Henderson said in an interview last week. A “surgical” bankruptcy would likely split the company in two, with the company that retains GM’s best assets becoming viable immediately. A host of problems must be solved for a bankruptcy to proceed. The company must show how it will save billions through concessions from bondholders and workers, deal with massive pension liability, and determine which dealerships and factories to retain.