Detroit

GM Preparing for Bankruptcy

When GM’s troubles first surfaced last fall, many suggested a managed bankruptcy was the best remedy. Now, a source tells Reuters that GM is in “intense” and “earnest” preparations for a possible bankruptcy filing. One likely solution is to split the company into a “new” company made up off GM’s most successful brands and an “old” one of less-profitable brands. According to Reuters, “If the plan goes through, the new GM is expected to assume some previous creditor debt from bankruptcy proceedings, such as secured debt, said the second source, adding that GM bondholders are likely to lose substantial value in bankruptcy.”