An update on the General Motors situation:
General Motors Corp., the world’s largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said.
GM’s path will be smoothed by an accord today giving some of its biggest bondholders an equity stake in the reorganized automaker. The U.S. Treasury is requiring that an unspecified percentage of debt holders accept the terms by 5 p.m. New York time on May 30, Detroit-based GM said in a regulatory filing.
If you doubt that GM has plans to go into bankruptcy, take a look at a comment by the Vice Chairman, Bob Lutz:
While not confirming GM’s intentions or a possible bankruptcy venue, said any court restructuring would be quick.
“We intend to get in and out very soon,” he said today at an Automotive Press Association luncheon in Detroit. “The U.S. government wants its money back, and our plan is to pay it back as quickly as possible. The U.S. government doesn’t want to own auto companies.”
If you didn’t have intentions of bankruptcy, why would you “intend to get in and out very soon”?
At this point, it’s just a matter of time…
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