GM Will File for Bankruptcy June 1; Accord Reached With Some Bondholders

[TwixVoy]

Source: Bloomberg

May 28 (Bloomberg) -- 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 bondholders agree to this up front, this would essentially be a prepackaged bankruptcy,” said Shelly Lombard, an analyst with New York-based bond-research firm Gimme Credit LLC. “GM could exit Chapter 11 faster.”

Battered by almost $88 billion in losses since 2004, GM fell short in a bid to cut debt by $44 billion under a U.S.-set June 1 deadline to restructure outside court. The 100-year-old automaker seeks to rebuild around assets such as the Cadillac and Chevrolet brands as it follows Chrysler LLC into bankruptcy.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a26dHH0N6LvY&refer=home

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Well looks like the day has arrived. Say goodbye to the last bastion of fair wages and manufacturing in this nation.

I am very sad about this.

[TwixVoy]

1. Interesting

According to further down the article this will be the 3rd biggest bankruptcy in US history.