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GM Will Declare Bankruptcy June 1: Insiders
By Harry Kimball
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Posted May 28, 09 1:27 PM CDT
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(Newser)
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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.