GM Debt-Equity Swap Fails Before Bankruptcy Deadline
Bankruptcy
A General Motors Corp. bankruptcy filing seemed inevitable after a rebellion by its bondholders forced it to withdraw on Wednesday a plan to swap bond debt for company stock.
GM has until Monday to complete a government-ordered restructuring that includes debt reduction, labor cost cuts and plant closures. But a Chapter 11 reorganization is likely after the company said its offer to exchange $27 billion in unsecured debt for 10 percent of the company's stock had failed. GM has received $19.4 billion in federal loans.
The move came as crosstown rival Chrysler LLC headed to court Wednesday to ask bankruptcy judge for permission to sell the bulk of its assets to a group headed by Italy's Fiat Group SpA in hopes of saving itself from liquidation. Attorneys for Chrysler maintain that the Fiat deal is the company's only hope to avoid being sold piece by piece, but car dealers, debtholders, former employees and others are protesting.
Chrysler filed for bankruptcy protection April 30, after the government ended talks with a group of holdout debtholders. Both automakers were pulled down by overwhelming debt, high pension, health care and other labor costs relative to competitors, a global auto sales slump and a dismal U.S. housing market that pulled down demand for pickup trucks, their top-selling vehicles.
News of the failed GM bond exchange offer sent its shares down 12 cents, or 8.3 percent, to $1.32 in morning trading.
John Pottow, a professor at the University of Michigan who specializes in bankruptcy, said GM evading Chapter 11 now is almost impossible.
Related listings
-
Court lets stand $13M judgment against Chrysler
Bankruptcy 05/26/2009The Supreme Court has rejected a request from Chrysler to overturn a $13 million punitive damages award to the parents of an 8-month-old boy who died in the crash of a Dodge Caravan. The justices without comment Tuesday left in place a ruling by the ...
-
Filene's Basement files for Ch. 11 reorganization
Bankruptcy 05/04/2009Discount retailer Filene's Basement says it has filed to reorganize under Chapter 11 bankruptcy protection, less than two weeks after its new owner said it was reviewing "all available options." The privately held company also reached a deal that wil...
-
Chrysler To File For Bankruptcy
Bankruptcy 04/30/2009Storied Detroit automaker Chrysler will file for bankruptcy in New York court almost immediately, senior administration officials said Thursday. "We worked very hard to keep this company out of bankruptcy," one official said on a conference call with...
Is Now the Time to Really Call a Special Education Lawyer?
IDEA, FAPE, CHILD FIND and IEPs: The Individuals with Disabilities Education Act (IDEA) guarantees all children with disabilities to a free appropriate public education (FAPE). FAPE starts with a school’s responsibility to identify that a child has a disability (Child Find) and create an Individualized Education Program (IEP) to suit the needs of the child.
Forte Law Group is one of only a very few law firms within the state of Connecticut that is dedicated to exclusively representing families and children with special needs.
Parents need to be persistent, dedicated and above all else aware of the many services and accommodations that their child is entitled to under the law. As early as this point within your child’s special education, many parents will often find themselves in the situation asking, “is now the time to really call a special education lawyer?” Here are a few things to consider when asking yourself that question.