GM to File Bankruptcy Monday Morning
Posted on Sun May 31, 2009 at 05:50:58 PM EST
Tags: General Motors (all tags)
General Motors is expected to file for bankruptcy protection tomorrow morning.
Under the restructuring, U.S. taxpayers will own 70% of the new company.
GM is racing to meet the government's Monday deadline to qualify for more aid. It already has received about $20 billion in government loans and could get $30 billion more to make it through what is expected to be a 60- to 90-day reorganization in bankruptcy court.
How it is expected to work: [More...]
it appears the company will sell some or all of its assets to a new entity that would become the new GM, rather than submit a plan to reorganize the old company.
Under a so-called Section 363 sale, the prospective buyer and seller present a fully negotiated asset purchase agreement for approval by the court.
GM's stock sank to $.75 a share on Friday.
In a Chapter 11 bankruptcy reorganization, the shares would become virtually worthless.
There will be job cuts:
It is expected that GM will detail some 20,000 job cuts and the closure of about a dozen plants by the end of 2010. The company has already said it will slash 40% of its network of 6,000 retail dealerships by next year and drop four of its brands -- Hummer, Saab, Saturn and Pontiac.
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