General Motors Corporation appears no closer to resolving a dispute with the company’s bondholders who feel they are being forced to make major concessions. And the lack of a deal could push the automaker into bankruptcy, a group representing those bondholders warns.
“GM’s bondholders were not asked to participate in creating this framework,” the bondholders said, in a letter to Treasury Secretary Timothy Geithner, in which they expressed their frustration with the negotiations. “Others determined what the bondholders should sacrifice in order to restructure GM,” the letter said, referring to the terms established in the bridge loan documents signed by GM and the Bush administration back in December.
The $13.6 billion in bridge loans helped GM avert bankruptcy at the end of 2008. But it also made clear that concessions were expected of all the company’s stakeholders, including its workers, who have already approved billions in givebacks.