GM board still not stating its decision on bankruptcy

DETROIT - General Motors Corp.'s board of directors met for a second day yesterday to make the final decision on whether the automaker would complete its restructuring by filing for bankruptcy protection tomorrow.

The outcome of the meeting could not immediately be determined. GM and the Treasury Department, which has been guiding the Detroit automaker toward a rescue plan that would give taxpayers nearly a three-fourths stake in the company, went into secrecy mode.

GM's bondholders had a deadline of 5 p.m. yesterday to accept an offer to swap their $27 billion in debt for at least a 10 percent stake in a new GM. If the Treasury doesn't get the amount of support it wants, bondholders could wind up with far less in bankruptcy court.

The Treasury had no immediate comment on the deadline passing, and GM spokesman Tom Wilkinson said the automaker did not plan any statements yesterday.

GM took a huge restructuring step Friday when the United Auto Workers union agreed to a cost-cutting deal, and early yesterday, Germany's finance minister said a plan had been approved for Canadian auto-parts maker Magna International Inc. to move ahead with a rescue of GM's Opel unit.

But there was still much to do to beat the government's deadline of tomorrow to qualify for more aid. The company has already received about $20 billion in government loans and could get $30 billion more to make it through what is expected to be a 60- to 90-day reorganization in bankruptcy court.

GM has yet to confirm it will seek bankruptcy protection, but it has scheduled a news conference for tomorrow morning in New York.

The Treasury on Thursday offered bondholders 10 percent of a newly formed GM's stock, plus warrants to buy 15 percent more to erase the debt. Last week, GM withdrew an offer of 10 percent equity after only 15 percent of the thousands of bondholders signed up.

It was unclear how many bondholders took the latest offer.

Getting as many bondholders as possible to sign on to the offer ahead of a bankruptcy filing could help the automaker get through the court process more quickly, said Robert Gordon, head of the corporate restructuring and bankruptcy group at Clark Hill PLC in Detroit.

"The more consensus you have," he said, "the more likely it is you'll be able to move through the bankruptcy process in an expeditious fashion with less resistance."