Preparations for a possible bankruptcy filing at General Motors have become "intense and earnest", according to a source familiar with the company's plans.
"We're talking about what could be the largest industrial company to ever go bankrupt. The preparations better be intense and earnest," the source said. "The preparations are being made because there's a short time frame here."
The source, who spoke on the condition of anonymity, said GM still hopes to win concessions from its creditors and unions that will allow it to avoid bankruptcy. But the June 1 deadline given to the company by President Obama and the Treasury Department to reach deals or go into bankruptcy has caused a pick-up in preparations, the source said.
GM owes about $28 billion to holders of its unsecured debt. It wants those creditors to agree to take an equity stake in the company in return for reducing that debt by at least two thirds.
A person involved with that committee said Tuesday that the reports about bankruptcy preparations at GM did not change the creditors' views. This source added that there have been no formal talks between the bondholders and the company since Obama's deadline was set last week, but that the committee is eager to hold negotiations.
An ad hoc committee representing GM bondholders have objected to this proposal due to the uncertain value of GM's stock going forward. I think Obama must do more hard work to find the problem solver of this financial crisis, General Motors have big revenue last year and today will be bankrupt? How America can conquer the world's economy? Ha ha LOL I don't think so. Taken from CNN(dot)com.