Industry experts say that filing for Chapter 11 bankruptcy is inevitable for General Motors. The automaker has just three weeks to get bondholders to swap $27 billion in debt for 10 percent of its stock, get the UAW and CAW to make concessions, close more plants, kill or sell brands and close a couple hundred dealerships.
“I just don’t see how it’s possible, given all of the pieces,” said Stephen J. Lubben, a professor at Seton Hall University School of Law.
Lubben, who specializes in bankruptcy, said that he doesn’t think “anyone is buying cars from a company who is wringing their hands about a potential bankruptcy for the past year or so.”
The General has received a total of $15.4 billion in federal loans and faces a June 1 government-imposed deadline to complete a new restructuring plan – otherwise it will be forced to go bankrupt.
“If we need to pursue bankruptcy, we will make sure that we do it in an expeditious fashion. The exact strategies I’m not getting into today, but we’ll be ready to go if that’s required,” CEO Fritz Henderson said during a conference last week.
– By: Omar Rana
Source: Detroit News