GM Misses Deadline for Debt Resolution Now Heading for Bankruptcy

May 27, 2009

(ChattahBox) —  General Motors, has lost a bid to get its bondholders to agree to a government-prescribed restructuring plan.  Under the plan, the GM bondholders would have received 10 percent equity in the company in exchange for their collective $27.2 billion in debt. GM needed the agreement of 90 percent of its bondholders. The 101-year-old global automaking giant now faces the largest-ever U.S. corporate bankruptcy based on the government-imposed deadline next Monday. GM did, however, reach an agreement with the United Auto Workers union, with the UAW agreeing to a 17.5% stake in a restructured GM along with $6.5B in preferred stock and a $2.5B note. The new restructuring plan will leave the government holding as much as a 70% stake in the automaker, and calls for paying off GM’s secured lenders in full to expedite bankruptcy reorganization. Even in the unlikely event the company has to be liquidated the federal government has agreed to back warranties for consumers who buy GM vehicles during restructuring.


Got something to say? **Please Note** - Comments may be edited for clarity or obscenity, and all comments are published at the discretion of - Comments are the opinions of the individuals leaving them, and not of or its partners. - Please do not spam or submit comments that use copyright materials, hearsay or are based on reports where the supposed fact or quote is not a matter of public knowledge are also not permitted.