General Motors is undergoing "intense and earnest preparations for a possible bankruptcy filing," Reuters reports. According to an anonymous source, the most logical reorganization entails splitting the company's profitable brands from the underperformers, a scenario that's been floated recently. GM would assume some debt from bankruptcy proceedings under this plan, said the source, and its bondholders' stake would plummet.
Last week, Fritz Henderson, GM's new CEO, said bankruptcy was more probable given the automaker's present dire situation.
""I've watched some bankruptcies work," Henderson said to our Detroit editor, Todd Lassa, "I've found them to be generally sloppy and value-destructive so I think I've learned about, you know, what are the risks of bankruptcy.
"I think the issues will be how do we work together to make it more successful. If I didn't want to be part of a bankruptcy, I would have said 'no.' They asked me to do this job, and they asked me to be part of the team, extended team...suppliers, dealers to make General Motors successful, whatever it takes. And that's what I'm going to do."
Source: Reuters