This scenario was also suggested today by the US Treasury Department. Such a suggestion may be a clear indication, if one was needed, that GM will file for protection on June 1. The company agreed with the proposal in a statement we list below.
"The U.S. Treasury proposal announced today provides incentives for GM's unsecured bondholders to support GM's restructuring efforts in the event GM decides to pursue a 363 sale as part of a bankruptcy proceeding."
"Implementation of this proposal would result in a New GM with a healthy balance sheet, putting the new company on a clear path toward long-term viability and success. GM appreciates the unwavering support of the U.S. Treasury and the President's Task Force on Autos and thanks the unofficial committee of bondholders for their support of the proposal."
To remind you, these latest developments come as an effect of GM's failure to persuade its bondholders to accept the exchange offer made public by the company on April 27. The American manufacturer admitted defeat earlier today, when it said "the principal amount of notes tendered was substantially less than the amount required by GM to satisfy the debt reduction requirement under its loan agreements with the U.S. Department of the Treasury."