Topic: GM said to be in ‘intense' bankruptcy preparations

[tpl]

Just by the way: David Suzuki, Canada's uncrowned King of Green was on BNN last night being interviewed.    He would NOT bail out any car companies.

http://watch.bnn.ca/wednesday/#clip164347      Auto bit starts 7:24 into this clip
http://watch.bnn.ca/wednesday/#clip164349
http://watch.bnn.ca/wednesday/#clip164350

[sailor723]

As I understand it it's largely up to the holders of GM's 27 billion in outstanding bonds now. If 90% of the bondholders don't agree to accept equity in exchange for their debt by June 1 then GM will have to file for bankruptcy.

I guess from a bondholder's point of view it all comes down to which option will have the smaller loss for them.

[carcrazy]

I think this unfolding drama will end-up with an arrangement (brokered by the Feds) behind the closed doors and GM will miraculously avoid bankruptcy at the last minute. What, under different circumstances, would not make any business sense it will suddenly be an acceptable solution.

BTW: Can anyone explain why the GM stock went up 20% today when all the reports about the company had the B-word in it and not in a positive way?

[safristi]

SUZUKI FLIES everywhere onna wings of a dove.........................then he wakes up and spews............ ...500 Giga TONS of B/S and double that of C02...............but "HAY" he's a mega star Gore blimey.......................

[toolatecrew]

http://uk.reuters.com/article/companyNewsMolt/idUKTRE54A6FT20090511

Looks like everyone is deserting the sdinking ship.

DETROIT (Reuters) - Six General Motors Corp (GM.N) executives disclosed on Monday they sold almost $315,000 in stock and liquidated their remaining direct holdings in the struggling automaker.

Lutz, who is now an adviser to the automaker, sold $130,989 worth of GM stock at the closing price of $1.61 on Friday.

That sale of the 81,360 shares cleared out all of Lutz's direct holdings of GM stock, according to his filing with the Securities and Exchange Commission.

The five other executives, including Lutz's successor, Thomas Stephens, GM North America President Troy Clarke, Chief Information Officer Ralph Szygenda and manufacturing chief Gary Cowger and head of European operations Carl-Peter Forster also sold all of their GM stock holdings, according to the filings.

Not that I blame them. They must have been peeing their pants hoping a trading window would open so they didn't lose it all. I think its a pretty clear indicator that bankruptcy is inevitable.

[Leviathan]

http://uk.reuters.com/article/companyNewsMolt/idUKTRE54A6FT20090511

Looks like everyone is deserting the sdinking ship.

DETROIT (Reuters) - Six General Motors Corp (GM.N) executives disclosed on Monday they sold almost $315,000 in stock and liquidated their remaining direct holdings in the struggling automaker.

Lutz, who is now an adviser to the automaker, sold $130,989 worth of GM stock at the closing price of $1.61 on Friday.

That sale of the 81,360 shares cleared out all of Lutz's direct holdings of GM stock, according to his filing with the Securities and Exchange Commission.

The five other executives, including Lutz's successor, Thomas Stephens, GM North America President Troy Clarke, Chief Information Officer Ralph Szygenda and manufacturing chief Gary Cowger and head of European operations Carl-Peter Forster also sold all of their GM stock holdings, according to the filings.

Not that I blame them. They must have been peeing their pants hoping a trading window would open so they didn't lose it all. I think its a pretty clear indicator that bankruptcy is inevitable.

To be expected:
GM details plans to wipe out current shareholders

May 05, 2009: 07:59 PM ET

*GM to issue up to 60 billion shares to swap for debt

*Current stockholders would get 1 pct of new company

*Plan would proceed with approval from U.S. Treasury

(Adds detail from SEC filing, quote from GM CEO, byline)

By Kevin Krolicki

DETROIT (Reuters) - General Motors Corp Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the United Auto Workers union.

The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said.

The flood of new stock issuance that could be unleashed has been widely expected by analysts who have long warned that GM's shares could be worthless whether the company restructures out of court or in bankruptcy.

The debt-for-equity exchanges detailed in the filing with the Securities and Exchange Commission would leave GM's stock investors with just 1 percent of the equity in a restructured automaker, ending a long run when the Dow component was seen as a bellwether for the strength of the broader U.S. economy.

GM shares closed Tuesday at $1.85 on the New York Stock Exchange. The stock would be worth just over 1 cent if the first phase of GM's restructuring moves forward as described.

Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split.

Such a move would take the nominal value of the stock back to near where it had been before the flood of new shares. But in the process, GM's existing shareholders would see their stake in the 100-year-old automaker all but wiped out.

The automaker said it expected to draw another $2.6 billion from the U.S. Treasury before a June 1 deadline set by the Obama administration for it to reach agreements with all of its key stakeholders.

That borrowing would take GM's debt to the U.S. government to $18 billion, and the automaker said it expected to have to borrow a total of nearly $27 billion.

GM has asked its three major creditor groups to write off at least $43 billion in debt in exchange for ownership of a restructured company.

By contrast, the current market value of GM's current 610 million shares is about $1.7 billion.

The stock has lost about 43 percent of its value since the start of the year.

GM bondholders, who are owed $27 billion, have also been offered new stock in exchange for writing off debt in a bond exchange the automaker launched last week.

The automaker is targeting a debt-reduction of at least $24 billion of its bond debt under the plan and has warned that it could be forced into bankruptcy if that cannot be achieved.

Representatives of GM bondholders, who would be given a 10-percent stake in the new company under the automaker's restructuring, have said they are being offered an unfairly low payout. They have asked instead for a majority stake in the restructured company.

But GM has asked the U.S. autos task force to accept a majority stake in a new GM in exchange for at least half of the government debt that the automaker has run up over the past four months.

Chief Executive Fritz Henderson said Tuesday that the U.S. Treasury, which oversees the task force, was continuing to evaluate the company's restructuring plan and its progress.

"The Treasury will continue their evaluation through the month, which is fine. But we're not waiting, we're implementing. The bond exchange needed to be launched when we launched it," Henderson said. "Now we'll have to see."

In its filing, GM said it was in "ongoing discussions" with the U.S. Treasury on its proposal to swap government debt for equity in the largest U.S. automaker.

Finally, GM is negotiating with the UAW and is seeking to get the union to take GM stock in exchange for $10 billion owed to a trust fund for retiree healthcare.

Those talks were set to resume this week in Detroit, Henderson said.

GM said in its SEC filing that its three-pronged effort to slash debt could take its total authorized share issuance -- including new and existing shares -- to 62 billion shares. (Reporting by Kevin Krolicki; editing by Carol Bishopric, Bernard Orr)

[carcrazy]

Only a miracle (read Government hard hand-twisting) could save GM from bankrupcy.

[articsteve]

Lutz dumped some shares this week. 

Executives selling stock include retiring vice-chairman Bob Lutz, who disposed of 81,360 shares at $1.61 each for a total of $130,990. Vice-chairman Thomas Stephens and Group Vice Presidents Carl-Peter Forster, Ralph Szygenda, Gary Cowger and Troy Clarke sold smaller amounts.

EDIT:  haha    I see Toolate are already posted that.  I'll just leave it up as it illustrates what a bunch of two bit pirates these guys really are/were.  They received multi million dollar salaries for at least the last decade when the company was bleeding and now don't have the dignity to stand by their company's stock.   Probably were stock option "gifts" from the company anyways.  Lutz sucks.   

[TopGun]

Lutz sucks.   

Indeed....

[articsteve]

I find that CTS hideous actually, but each to his own. 

[safristi]

..LUTZ SUCKS..is that an anagram................maybe he needed the Money ta fuel tha Family JET..............I'm just jealous