With General Motors' bankruptcy filing all but assured, details of the deal are being hashed out as you read this and sources are coming forward to secretly divulge some of the more critical aspects of the plan. The newest tidbit comes from an unnamed source familiar with the negotiations speaking with Reuters who said that GM's Chapter 11 filing would create a new company comprised of the General's positive assets and will be initially owned by the U.S. government. The report lends further credence to the "good" GM, "bad" GM plan we've been hearing about for weeks, with one company taking on all of GM's deficient assets and another separate entity comprised of the positive assets, the latter of which could honor the claims of secured lenders, possibly paying back most or all of the money owed. But what about the taxpayer loans?
Reuters' source indicated that the new government strategy for GM would include extending the U.S.' credit line to the newly formed company and forgiving the majority of the $15.4 billion federal loans to the automaker. Additionally, the government could give both bondholders and GM's unions a stake in the company, and although a new board would be established – pending review from the government's oversight board – Rick Wagoner's successor and GM's new CEO, Fritz Henderson, would likely head the new company. Shocking? Hardly. Disturbing? Sound off in the comments below. Thanks to all who tipped in.
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