The coming GM bankruptcy

The "darkest day in American business history" is coming, said Matthew DeBord in The Big Money via Reuters. General Motors will likely file for Chapter 11 bankruptcy protection on or about June 1. Yes, GM has been in a "limbo-like quasi-bankruptcy" for months, and, yes, the giant automaker has made its share of mistakes. But this is a company that helped build America, so you'd "have a cold and mercenary character" not to be saddened by a GM bankruptcy.

This will be perhaps "the biggest and most-watched" bankruptcy filing in legal history, said Micheline Maynard and Michael J. de la Merced in The New York Times. Splitting off GM's good and bad assets -- so desirable brands like Chevrolet and Cadillac can be sold to a new company, while "less-attractive assets" stay in the old GM -- will be extremely complicated. Auto workers may be losing jobs, but the GM bankruptcy "will be putting a lot of lawyers to work."

True, but "bankruptcy is not a done deal," said David Goldman in CNNMoney. GM can still avoid Chapter 11 if it can convince its bondholders, who hold 40 percent of the company's debt, to accept a smaller stake in the company -- say, 10 percent. A GM bankruptcy could be a better deal for the bondholders, though, so they might be "willing to take that gamble."

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