Stalled Bond Swap Means GM Bankruptcy Likely

Law360, New York (May 27, 2009, 12:00 AM EDT) -- General Motors Corp. is likely headed for bankruptcy court, now that its bondholders have refused to go along with the beleaguered automaker's planned debt-for-equity swap.

GM said Wednesday that its offer to swap $27 billion in bond debt for 10 percent of company stock was rejected by bondholders. The exchange offers expired at 11:59 pm Eastern time on May 26.

GM has said the debt-for-equity swap was a key component to keeping the company out of bankruptcy court.

"The principal amount of notes tendered was substantially...
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