GM Told To Prepare For June 1 Bankruptcy

There’s still a chance that GM (GM) will come to an agreement with bondholders and avert a bankruptcy, but it’s looking pretty unlikely.

As such, the Treasury has told GM that June 1 is the cutoff and to start preparing for bankruptcy on that day.

Members of the Treasury’s auto task force have held a series of calls with the company to prepare for what they’re calling a “surgical” bankruptcy. Quick, pre-planned, efficient, etc. In fact, under one scenario, a “Good GM” would emerge from bankruptcy in just two weeks with $5-$7 billion in capital from the Government.

Not surprisingly, says the Times, one of Obama’s main concern is “harming workers.” Although the UAW will take some kind of hit, we’ve always suggested that the GM “bailout” was always about bailing out the UAW, which would be thrown to the wolves in a real, court-style bankruptcy.

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