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GM Will Declare Bankruptcy June 1: Insiders

By Harry Kimball, Newser Staff

Posted May 28, 2009 1:27 PM CDT

(Newser) – General Motors will file for bankruptcy protection Monday, insiders tell Bloomberg. The company has apparently decided that it cannot make the government-mandated June 1 deadline to shed $44 billion in debt. The timeline is unclear, but bondholders' agreement today to forgive debts in exchange for a stake in the “new” post-bankruptcy GM apparently helped the company firm up its course of action.

“By freeing GM of tens of billions of dollars in debt, bankruptcy will give it a new lease on life,” one expert said. Bond yields and stocks were up on the news. The new, streamlined GM—likely made up of Chevrolet and Cadillac—could emerge from bankruptcy in as little as 2 months, the same schedule set for Chrysler. That would leave other assets tied up in bankruptcy proceedings.

General Motors President and CEO Fritz Henderson. (AP Photo)

GM headquarters in downtown Detroit. (AP Photo)

Chart shows earnings for General Motors Corp. and share price since January. (AP Photo)

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GM Will Declare Bankruptcy June 1: Insiders

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OTHER STORIES ON OUR RADAR

Chrysler • General Motors • debt • recession • Treasury Department • Chevrolet • auto industry • Cadillac • bankruptcy protection • bondholder

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Car Sales Jumped 14% Last Month

Chrysler, VW saw huge gains

Obama Should Campaign on Auto Bailout

Some Republicans were ready to let GM, Chrysler die: Jonathan Cohn

US Vehicles Edge Out Imports in Quality

Ford highest-ranked carmaker overall, Toyota falls

GM: Stop Calling Them 'Chevys'

Car giant tries to improve 'branding' by killing nickname

GM Recalls 1.5 Million Cars After Reports of Fire

At least 5 vehicles caught fire thanks to washer fluid

About Us

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Newser By Users

Community

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What is Newser?