Almost Official: GM to File for Bankruptcy on Monday

Rumors surrounding General Motors' fate continue to surface, with a new story claiming that the American auto giant might file for bankruptcy on Monday. Just like in Chrysler's case, General Motors intends to form a new entity that would receive most of its assets, Bloomberg reported today citing sources close to the matter. As the company mentioned in the last survival plan submitted to the government, its future will revolve around four core brands, namely Cadillac, Chevrolet, Buick and GMC.

GM Vice Chairman Bob Lutz, already hinted that the 100-year-old automaker might step under Chapter 11 protection but insisted that in case such a scenario would happen, he will strive to pull the company out of bankruptcy as soon as possible.

“We intend to get in and out very soon,” he was quoted as saying by the aforementioned source. “The U.S. government wants its money back, and our plan is to pay it back as quickly as possible. The U.S. government doesn’t want to own auto companies.”

Unlike Chrysler, the bankruptcy period will last 60 to 90 days, according to an Obama administration official. Furthermore, the United States government will support the automaker during this timeframe, with financial aids to amount for $50 billion.

According to recent rumors, the new General Motors would be divided in multiple parts, as it follows: the US Treasury - 72.5 percent, an union health-care trust - 17.5 percent and the old GM - 10 percent. The bankruptcy filing will state that the newly-formed General Motors's debt would consists of around $8 billion sourced from the US Treasury, $2.5 billion coming from to the United Auto Workers fund and $6.5 billion dividend-paying preferred stock.