General Motors has started “intense” preparations for bankruptcy
According to a source who wishes to remain anonymous, General Motors has begun “intense and earnest” preparations for a possible bankruptcy filing. The source who spoke to CNNMoney.com said that GM is still hoping to win concessions from creditors and unions to avoid a possible bankruptcy. However, the June 1 deadline given to GM by President Barack Obama and the U.S. Treasury department has led to intense bankruptcy preparations due to the short time frame.
The source said that there have been no formal talks between bondholders and the company since Obama set the deadline last week; however, the committee is very eager to hold negotiations.
GM is hoping that those creditors agree to take an equity stake in the company in return for reducing debt by at least two-thirds. GM owes about $28 billion to holders of unsecured debt.
– By: Omar Rana