GM had offered bondholders a 10 percent stake in the restructured company to reduce its $27 billion debt and avoid going into bankruptcy court. However, yesterday GM failed to gain the near 90 percent of bondholder support to accept a debt-for-equity swap. Sources say that GM is now planning to file for Chapter 11 bankruptcy by June 1.
According to a report by the New York Times, the U.S. Treasury will have to inject an additional $50 billion to get GM through Chapter 11. It has already loan more than $20 billion to the struggling automaker. In return for its ‘investment,’ the U.S. Treasury Department will receive...
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