In a report filed this morning with the U.S. Securities and Exchange Commissions, auditors from Deloitte & Touche LLP reported that filing Chapter 11 might be the only option for General Motors. In order to regain footing in the industry and began operating in such a manner that is conducive to future viability, both shareholders and UAW members must be in written agreement of GM’s proposed successions by March 31st. Only by receiving consent will GM then be able to move forward with their aggressive restructuring plan. Should GM fail to receive the requisite signatures, the U.S. Treasury will call in their $13.4 billion federal loan, essentially forcing the General to file for bankruptcy protection.
Fortunately for GM, however, simply raising significant doubts amongst their auditors is not cause enough to spark a default on their loan agreement. Confident that they will meet their March 31st deadline and continue with debt restructuring, GM said in a statement, “Consequently, we are not in default of our covenants. If we conclude that there is substantial doubt about our ability to continue as a going concern for the year ending Dec. 31, 2009, we will have to seek similar amendments or waivers at that time.”
Source: Auto AP