The goal would be to put the company through a very quick restructuring process in bankruptcy court in order to prevent damage to GM's image and sales, according to a report by the New York Times. The entire process could take just two weeks, which would be astonishingly fast for a Chapter 11 proceeding -- especially for a company the size of General Motors.
As reported last week, one bankruptcy strategy currently being evaluated is splitting GM into two companies. Under such a scenario, a new company would be formed from the General's most successful units. The "new" GM would inherit some secured creditor debt but would otherwise be freed of the "old" company's problems. The "old" GM -- consisting of defunct brands and bad debt -- would likely be liquidated via Chapter 7 proceedings over several months or years. Bondholders would lose a substantial amount of money, and dealer, union, and supplier obligations could be severed.
Meanwhile, the fate of supplier Delphi is also a major topic of concern. The company has until April 17th to reach an agreement with GM and the government over the future of its parts business. Although the deadline could be pushed to April 24th, there is concern the company could be forced to liquidate. If that happens, the government might acquire parts of Delphi's business on GM's behalf in order to maintain the supply of parts.