After having already received public funding of 15

Implementing "surgical" bankruptcy of General Motors (GM), on the model of the procedure used for Chrysler, seems inevitable. On the eve of the date of May 26 deadline by the "task force" Government for an agreement on the reduction of the debt, most creditors continue to reject the idea of a "calms" conversion Despite the conclusion Thursday of an agreement in principle with the UAW Union (United Auto Workers) on downsizing and the financing of the health insurance fund, the GM bondholders refuse to play the role of "goat-emissaries" and argue de facto for its bankruptcy. As in the case of Chrysler, the agreement with the Union should not allow to avoid the development under Chapter 11 of GM stimulus could pass through the injection of some 30 billion dollars (21 billion euros) of additional public funds.

"It is blatant unfairness." "Then the Treasury and the UAW should get 89 of the capital in exchange for the surrender of 20 billion dollars in debt, bondholders are offered 10 of the capital for an abandonment of debt of $ 27 billion" rebelled Mark Modica, a dealer of Pennsylvania, which is part of a group of rebel creditors, called "Main Street Bondholders" (the underwriters of Main Street). According to the GM proposal contested by creditors, they would get 10 of the capital of the manufacturer against 50 for the Government in exchange for the surrender of 10 billion dollars of debt to June 1, the Veba of coverage the UAW Union health fund inheriting from 39 in exchange for quitting at 10 billion dollars of debt on the constructor.

"We do not believe that nationalize one of the most important groups of America is good policy for our country", said Eric Siegert of Houlihan Lokey Howard & Zukin, financial advice to investors who have formulated their own counter-proposal. In their counterproposal, bondholders claimed 58 of the capital of GM restructured against 41 for the UAW and 1 for current shareholders. On the other hand, the Government would not share in the capital but would retain a status of a secured creditor.

"Government Motors".

The investor most exposed include Vanguard Group, Barclays Global Investors, Credit Switzerland, Northern Trust Investments, Goldman Sachs, Morgan Stanley... but also the pension funds of teachers in New York or California officials. Friday, rebel creditors received the support of several Republican members who have written Treasury to denounce discriminatory treatment of bond to the UAW Union policyholders most on the transformation of GM "Government Motors" or "general Mess".

If the accession of 90 of the bondholders to here tomorrow plan, GM will be forced, as Chrysler, place themselves under the protection of the system of bankruptcy in Chapter 11, at the end of the week, according to the "Washington Post". "My hope is that we will see GM and Chrysler emerged from this process, thinner, more efficient and more competitive," said, this weekend, Barack Obama, suggesting that he thus reserve similar to the two manufacturers treatment. After having already received public funding of $ 15.4 billion, GM received Treasury Friday a new loan of 4 billion to pay its suppliers before June 1. In total, according to the "Washington Post", the Government would be ready to inject additional $ 30 billion in the restructuring of GM. A condition, however, to the counters to zero, as Chrysler.

Despite the protests of the creditors, several economists, among them the Nobel Prize in economics Joseph Stiglitz, are convinced that chapter 11 is the best way to ensure restructuring in depth of the constructor in the releasing of the weight of its debt. Despite the uncertainties about the impact of Chapter 11 on sales, the satisfactory conduct of the process of rapid recovery applied so far to Chrysler the tribunal to give Wednesday the final green light to the transfer of the company to Fiat and the UAW favours the use of a similar way to GM.