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GM bondholder offer fails; bankruptcy closer

Posted Wednesday, May 27, 2009, 1:39 pm in Employee News

General Motors Corp. has failed to lure enough bondolders to swap debt for a 10 percent stake in the company, which pushes the automaker closer to a Chapter 11 bankruptcy filing, The Detroit News reported.

The number of bondholders who agreed to the swap was “substantially less” than the 90 percent mandated by the U.S. Treasury Department, which has loaned GM $19.4 billion, the paper said. The offer, which expired at 11:59 p.m. Tuesday, was widely viewed as unlikely to tempt GM’s unsecured bondholders to exchange about $24 billion in debt for a 10 percent piece of the restructured automaker, the News said.

The failed exchange could force GM to file Chapter 11 bankruptcy by Monday, the deadline by which the automaker was required to restructure and reach money-saving concessions with the UAW and bondholders, the story said. (The Detroit News)
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