Monday, April 13, 2009

US govt tells GM to prepare for bankruptcy filing

AFP - Monday, April 13

2316162193-us-govt-tells-gm-to-prepare-for-bankruptcy-filingWASHINGTON (AFP) - - The US Treasury Department has told General Motors to make all necessary preparations for a possible bankruptcy filing by June 1, even though the troubled automaker insists it can restructure its business on its own, The New York Times reported.

Citing unnamed people "with knowledge of the plans," the newspaper said the instructions had been conveyed by members of President Barack Obama’s automotive task force, who spent last week in meetings and on conference calls with GM in Detroit and Washington.

The talks are expected to continue this week, the report said.

According to the paper, the goal is to prepare GM for a fast "surgical" bankruptcy.

The automaker already has been granted 13.4 billion dollars in federal aid, and its managers are insisting the company's image should not be damaged.

The preparations are aimed at assuring a GM bankruptcy filing is ready should the company be unable to reach agreement with bondholders to exchange roughly 28 billion dollars in debt into equity in GM and with the United Automobile Workers union, which has balked at granting concessions without sacrifices from bondholders, The Times said.

From Yahoo! News, Singapore. Find the source article here.


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