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The familiar expression goes "Better the devil you know," meaning it's preferable to deal with the nasty things you don't like but are at least familiar with. General Motors, however, doesn't seem to think so. The troubled automaker appears more ready to take its chances with bankruptcy than continue to fight the weight of monumental debt and the demands of restructuring it.

GM has a $1 billion payment due on June 1, the same day as the government-imposed deadline for having its financial house cleaned up. The company's chief financial officer has just gone on record as saying that GM does not intend to make that payment. The General will attempt another round of debt-for-equity swaps (DFE) with its bondholders, and if it succeeds – and also succeeds in restructuring $20 billion in UAW healthcare obligations – it will get money from the government to continue without bankruptcy. If the DFE doesn't meets its goals, then GM is set to go into government-backed Chapter 11, court protection and what will likely be a nearly clean slate to restart its debt negotiations.

Last week, bondholders said they were preparing a response to GM's most recent offer. The automaker says that it will do what needs to be done "in court or out of court," which means that unless the bondholders' response is "Yes," bankruptcy is a fait accompli.

[Source: Wall Street Journal | Image: Bill Pugliano/Getty]

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    • 1 Second Ago
      • 5 Years Ago
      I really wish I could take out a multibillion dollar loan, tell the lender I have no intention to make my payments, and then ask for billions more. Man, it must be nice to be a huge auto maker!
      • 5 Years Ago
      The bond holders and banks greed is going to come back to bite them in the rear. This whole show has been headed for the bankruptcy stage from the start. It's the only way GM can get out from under having too many dealers and brands.
      • 5 Years Ago
      How are the bondholders going to suffer more due to being greedy? My understanding is that they'll be in line to get a greater percentage of what they are due if GM goes bankrupt than they would get it they accept GM's offer now. If that's the case, they are better off holding out.

      Either way they are losing money of course, but they'd lose somewhat less under bankruptcy.
      • 5 Years Ago
      The GM creditors' committee must be an interesting place to be these days. If GM doesn't file I'd imagine the GM creditors' committee must be considering forcing an involuntary bankruptcy. With the arguably insulting offers the PTFOA is pushing, I can't imagine the creditors are in a particularly accommodating mood.
      • 5 Years Ago
      "You got the champagne ready?!" POPS CORK...

      -Alan Mulally
      • 5 Years Ago
      "The familiar expression goes 'Better the devil you know,' meaning it's preferable to deal with the nasty things you don't like but are at least familiar with."

      oh autoblog, thank you so much for explaining american idioms so thoroughly lest we the audience--having grown up in caves--completely miss your point. in my own writing, i constantly strive to belittle the reader's intelligence but rarely do i succeed on the level that you do, and you guys do it so naturally, so unwittingly! kudos. actually u'know what, make it double kudos.
        • 5 Years Ago
        I'm an Autoblog reader; what are these "kudos" you speak of?
      • 5 Years Ago
      Are they doing the old "Not known at this address" trick? You send the bill back marked thus, then claim you never got it when they come calling. They produce the returned bill and you claim your roommate must have done it by mistake. Works every time. When GM do eventually send in the check, they should staple it to the bill, that way it must be processed by hand. When sending checks always do exactly what it tells you not to do on the bill. Oh, and always remember to forget to sign it.
      • 5 Years Ago
      If I understand this correctly, I will get 3 cents for every dollar of my GM bonds....I might as well go on and lose that last 3%...lose over a quarter million and wind up with a little over $7000? Does that sound remotely fair?
      • 5 Years Ago
      Ya know, at this point I'm ready for them to go bankrupt. There have been enough large-scale BKs in recent times (airlines anybody?) where the company kept operating, that BK is probably the best option for survival. Bring it on!
      • 5 Years Ago
      I'm ready for GM to go into bankruptcy, the stock market to plummet, and then to buy in when completely unrelated items are grossly undervalued.
        • 5 Years Ago
        That's the way I feel, I thought I was the only one. I'm glad I'm not.
      • 5 Years Ago
      At this point, GM deserves Chapter 11.

      They saw the fork coming, then the government took hold of the fork and told them to shape up. Now they just welcome the fork with open arms. Let 'em get stuck.
        • 5 Years Ago
        man...now i kind of want a salad.
      • 5 Years Ago
      STOP!!!!!!!! letting them them have are $$$$$$ ( BUY FORD =))). )
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