Report: U.S. Treasury asks GM to prepare for bankruptcy filing by June 1

According to a report by The New York Times, the U.S. Treasury Department is asking General Motors to prepare for a bankruptcy filing by June 1. Sources familiar with the matter said that the goal is to prepare the company for a fast “surgical” bankruptcy.

The company’s new CEO Fritz Henderson said that he still believes that General Motors can restructure without going into bankruptcy but said that a quick “surgical” bankruptcy is something that he’s willing to consider.

The preparations are being pursued to assure a bankruptcy filing if GM is unable to reach agreement with bondholders to exchange $28 billion in debut into equity and an agreement with the UAW, which has openly said that it won’t make concessions unless the bondholders do.

Talks between the Obama automotive task force and GM officials are expected to continue this week.

– By: The Daily Auto Editor

Source: NYT