GM Bankruptcy Tomorrow? Don't Be Shocked
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GM Bankruptcy Tomorrow? Don't Be Shocked
Don't be surprised if GM either files bankruptcy tomorrow, or word "leaks" they'll be doing it Wednesday.
TheGMSource - The places are already in place for GM to file for bankruptcy protection. A General Motors bankruptcy would be the biggest filing by any company, ever in bankruptcy court, but it's appearing likely as each day passes. I'm going to go out on a limb here, in a big way and say that GM will file for bankruptcy protection tomorrow (Tuesday.) Here's why...
As we reported last week, General Motors has secured a deal with both of its unions, the UAW and the CAW. Both deals were seen as unlikely to happen, especially the UAW deal. Now that GM has a deal with both of its major unions there won't be a fight from retirees or the UAW to hold up or stall GM in court. They already have their deal which will be preserved in bankruptcy court.
General Motors made it public Friday the company received an additional $4 Billion loan from the U.S. Treasury Department. The company says it's because of a "downturn in operation revenue." My take? GM did need the $4 Billion, but they drew the loan to pay suppliers before the holiday weekend. It's my belief that GM used the money to pay their suppliers money owed to them before the automaker files for protection. If GM filed for protection before issuing payment, the suppliers would be out of luck and some may have been forced to file for bankruptcy themself.
Tomorrow (Tuesday) is very key to all of this. A few weeks ago GM outlined a plan to eliminate its debt for equity with bondholders. GM has offered 10% of the company in exchange for $27 Billion in debt. Bondholders have shrugged off the deal. Why is Tuesday so important? GM's debt swap offer is set to expire on May 26th. GM also said in a statement Friday with the SEC that hey have been unable to reach a deal with bondholders on the expiring offer. The automaker said it would update the SEC Tuesday if it plans to extend the deadline for bondholders. That seems very unlikely.
Considering everything that's already happened (UAW, CAW) and everything that has yet to happen (bondholders) GM has what it needs to file bankruptcy. Like Chrysler there's only one issue keeping GM from bankruptcy protection: Bondholders. The company doesn't have to worry about the Unions and that was their biggest hurdle.
Josh E. Oliver
JOliver@TheGMSource.com
As we reported last week, General Motors has secured a deal with both of its unions, the UAW and the CAW. Both deals were seen as unlikely to happen, especially the UAW deal. Now that GM has a deal with both of its major unions there won't be a fight from retirees or the UAW to hold up or stall GM in court. They already have their deal which will be preserved in bankruptcy court.
General Motors made it public Friday the company received an additional $4 Billion loan from the U.S. Treasury Department. The company says it's because of a "downturn in operation revenue." My take? GM did need the $4 Billion, but they drew the loan to pay suppliers before the holiday weekend. It's my belief that GM used the money to pay their suppliers money owed to them before the automaker files for protection. If GM filed for protection before issuing payment, the suppliers would be out of luck and some may have been forced to file for bankruptcy themself.
Tomorrow (Tuesday) is very key to all of this. A few weeks ago GM outlined a plan to eliminate its debt for equity with bondholders. GM has offered 10% of the company in exchange for $27 Billion in debt. Bondholders have shrugged off the deal. Why is Tuesday so important? GM's debt swap offer is set to expire on May 26th. GM also said in a statement Friday with the SEC that hey have been unable to reach a deal with bondholders on the expiring offer. The automaker said it would update the SEC Tuesday if it plans to extend the deadline for bondholders. That seems very unlikely.
Considering everything that's already happened (UAW, CAW) and everything that has yet to happen (bondholders) GM has what it needs to file bankruptcy. Like Chrysler there's only one issue keeping GM from bankruptcy protection: Bondholders. The company doesn't have to worry about the Unions and that was their biggest hurdle.
Josh E. Oliver
JOliver@TheGMSource.com
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From: Austin
-Bob
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Josh has a history of burning bridges. It goes back to a conflict b/t C&G and GMI. Then there was the whole Outlook cancellation debacle (which I sided with him on and defended him). He got really bitter and has had sour grapes for quite a while.
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I don't understand people beating on Josh. Seems ok to me.
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Josh is an okay dude.
C&G was at it's best when he was there and all of the correct admins were in charge. It's basically a big hilarious joke now. The whole Outlook thing was a set up and a power struggle. It's funny that all of those who didn't like Josh have either left the site now or are basically trolls. Guess that's what happens when you realize that it takes WORK to build a credible GM community.
C&G was at it's best when he was there and all of the correct admins were in charge. It's basically a big hilarious joke now. The whole Outlook thing was a set up and a power struggle. It's funny that all of those who didn't like Josh have either left the site now or are basically trolls. Guess that's what happens when you realize that it takes WORK to build a credible GM community.
