Idea of quick GM bankruptcy filing meets with skepticism
Uncategorized Comments OffpstrongBy Sharon Silke Carty, USA TODAY/strong/p
pDETROIT — General Motors (GM) may be inching toward bankruptcy court, but the theory that GM could get through the process quickly faces increasing skepticism./p
pOn Friday, Fritz Henderson said he came into his new position as GM’s CEO three weeks ago believing a bankruptcy filing was more probable than not./p
p#8220;I feel the same way today,#8221; he says. Henderson said GM is working on two scenarios: one that involves bankruptcy and one that doesn’t. The plan that does not includes looking at each GM brand to see if it’s needed. USA TODAY reported Thursday that dropping Pontiac and GMC was being looked at, along with Hummer, Saab and Saturn, which are already on the block./p
pGM has resisted filing for bankruptcy court protection, saying the process would be messy and long and would scare away customers. But some in the government have argued that GM could enter a #8220;prepackaged#8221; bankruptcy that could take a few weeks and result in a healthier company./p
pNot so, says Doug Bernstein, an attorney who heads Plunkett Cooney’s banking, bankruptcy and creditors’ rights practice. He looked at recent prepackaged bankruptcies and saw that none took less than six months./p
pThat’s because bankruptcy law allows every interested party to be heard by a judge, which can take weeks, months or years. Auto supplier Delphi filed in October 2005. It is still in bankruptcy court, and more than 16,000 documents have been filed./p
p#8220;The process of bankruptcy cannot be rushed,#8221; Bernstein said./p
pGM has received $13.4 billion in federal loans, and President Obama said it must offer a more aggressive restructuring plan by June 1 to get more aid. Henderson says GM will be prepared to file for bankruptcy if it can’t reach its goals in other ways./p
pTalks with bondholders are going slowly. Henderson said the company is having talks but nothing he would classify as #8220;intense negotiations.#8221; GM is looking to cut two-thirds of its debt by swapping bonds for GM shares. Bondholders have resisted, saying GM’s plans won’t make it profitable any time soon./p
pTalks with the United Auto Workers are also going more slowly than expected because the UAW also is negotiating with Chrysler. The unions and bondholders are watching to see what the other will give up and to get a better idea of what the revamped GM would look like.br /
a rel=nofollow target=_new href=http://www.usatoday.com/money/autos/2009-04-19-gm-quick-bankruptcy-skepticism_N.htmSource/a/p
div style=’margin: 4px; float: none;’centerp class=’linktext’Permanent link to this post: a title=’Idea of quick GM bankruptcy filing meets with skepticism’ href=’http://hotnews.0fees.net/2009/04/idea-of-quick-gm-bankruptcy-filing-meets-with-skepticism/’Idea of quick GM bankruptcy filing meets with skepticism/abr/From the a href=’http://hotnews.0fees.net’Hot Web News/a weblog/div/p/center