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GM Bankruptcy ‘Inevitable’ as Bondholders Spurn Offer
May 27 (Bloomberg) -- A General Motors Corp. bankruptcy filing became almost certain after the 100-year-old automaker failed to persuade enough bondholders to take equity in a streamlined company in exchange for $27 billion of debt.
The debt-for-equity swap offer by GM, the world’s largest automaker until its 77-year reign ended last year, failed to win the required 90 percent approval of bondholders by the time it expired last night. The proposal was part of an effort by the Detroit-based company to cut its debt by $44 billion before a June 1 deadline in order to qualify for more bailout loans.
“The expiration of General Motors’ exchange offer makes a bankruptcy filing inevitable,” said Richard Hahn, co-chairman of the bankruptcy practice at Debevoise & Plimpton LLP, a New York law firm that isn’t involved in the GM negotiations.