Wednesday, May 27, 2009

A General Motors bankruptcy filing appears inevitable now that a rebellion by bondholders forced it to withdraw 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. Bankruptcy reorganization is seen as likely after the company said its offer to exchange debt for 10 percent of the company's stock failed. GM has received more than $19 billion in federal loans.

A GM spokesman says the board will meet later this week to decide its next move, but he would not say exactly when. He also would not say if the company would soon file for Chapter 11, nor would he reveal what percentage of bondholders took the offer.