A dispute between GM bondholders and the U.S. government all but doomed the falling fortunes of embattled car giant General Motors as the two parties failed to come up with an amicable settlement for the proper stakes of the company.
The government had asked GM to submit a plan that 90 percent of its bondholders would agree upon which unfortunately was way off the expected agreement. With that said, GM is expected to head to bankruptcy in the following days, a move that many are expecting.
This new development only further upholds that the stimulus plan that was handed over to the Big Three some months ago went for nothing at all. Already highly controversial, the move was already highly criticized and with this impending Chapter 11 filing of GM, they and Chrysler have all but wasted the said aid, leaving Ford all by its lonesome although they too are surely to be having problems financially.
A person familiar with discussions between GM and the government told The Associated Press any bankruptcy filing would probably come around the government’s Monday deadline for GM to finish restructuring or enter court protection. The person asked not to be identified because the talks are private.
To avoid bankruptcy, the government had said GM must shed debt, cut labor costs and close plants.
(Source) Yahoo
Tags: amicable settlement, bankruptcy filing, bondholders, car giant, Chapter 11, Chrysler, falling fortunes, Ford, General Motors, GM, plants, rejection, restructuring, stimulus plan