Tuesday, May 26, 2009

GM Closer to Bankruptcy

by Calculated Risk on 5/26/2009 02:03:00 PM

A couple of stories ...

From Reuters: GM Bondholders Reject Plan, Setting Stage for Bankruptcy

General Motors has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest-ever U.S. industrial bankruptcy ...

Reuters' sources said GM will likely file for bankruptcy some time after midnight Tuesday, but before June 1.
And from The WSJ: UAW Discloses Terms of GM Deal

According to the WSJ, the UAW Voluntary Employee Beneficiary Association (VEBA) was owed $20 billion, but will take $10 billion in cash, a note for $2.5 billion (payable over the next 7 years), $6.5 billion in preferred stock, and own 17.5% of GM - plus a warrant for 2.5% more of GM's new common stock.

It sounds like the bankruptcy will be filed this week.