GM said before a crucial vote by bondholders on a tender offer of stock for debt that the company would declare bankruptcy if the bondholders rejected its offer.
The bondholders did, but so far GM hasn't filed any Chapter 11 papers. Most analysts seem to think that it's only a matter of time, however. One reason for the delay could be that the company is trying to get approval from the United Auto Workers for a new set of concessions.
In the meantime, GM has already begun bundling its European operations under its German company, Adam Opel, in order to facilitate a sale of the business. One potential buyer for GM's European assets is Italian automaker,
Fiat. Fiat is also attempting to purchase substantially all of
Chrysler's assets as well, a move that a bankruptcy judge is mulling
over in New York today.
Monday, June 1 is the government's
deadline for GM's restructuring. Most observers predict that the
company will file for bankruptcy no later than that, though many expect
a filing before the week's end.
In a post on FindLaw's Strategist blog
yesterday, I mentioned how a GM bankruptcy could tax BigLaw bankruptcy
attorneys who already have their hands full with the Chrysler and
Lehman Bros. bankruptcies (not to mention a slew of other complex
corporate bankruptcy actions.)
This could mean that corporate
legal departments may have to take on more of the work than usual
during a big bankruptcy, or else divide the work and parcel it out to
smaller, less expensive boutique firms.