Thursday, May 28, 2009

GM to File for Bankruptcy June 1

A proposal by General Motors to let bondholders receive up to a 25 percent stake if they do not oppose its bankruptcy reorganization — a bigger share then G.M. offered the autoworkers union — has received the support of a group representing many of the company’s largest debtholders.

In a regulatory filing, G.M. also set Saturday afternoon as the deadline for other bondholders to support the plan. The company is expected to seek bankruptcy protection by Monday, the deadline set by the Obama administration.

“Unless a sufficient number of bondholders sign statements backing the plan, the amount of stock and warrants for bondholders would be “substantially reduced or eliminated,” G.M. said in the regulatory filing. A person briefed on the matter said G.M. was seeking support from investors holding about 50 percent of G.M.’s $27 billion in bond debt. The plan already has the support of about 35 percent, according to people briefed on the matter. NYT

Kucinich, one of five democrats who are disturbed by the auto task force (read about that here):