General Motors Expected to Claim Bankruptcy

General Motors is likely to claim bankruptcy. The company was hoping to convince 90 percent of its shareholders to exchange their debt for equity. The Los Angeles Times spells out GM's offer to its bondholders to trade 225 shares of stock for every $1,000 in bonds. Businessweek continues on the same thought to explain that the mass conversion of debt into stock would allow the company to receive more tax dollars and therefore avoid formal bankruptcy. The chances of this seem grim.

The United Association of Workers Union is currently holding meetings to vote on a new contract with the automaker (Los Angeles Times). Their proposed agreement would give the federal government as much as 70 percent equity in the company while allowing the UAWU to receive approximately 17.5 percent.

CNNMoney.com reports that the Obama administration plans to escort GM into bankruptcy court on Monday and implement a restructuring policy that may end up costing taxpayers billions more than originally assumed. This newest addition to the long line of recently bankrupted companies is expected to push the U.S. unemployment rate above 9 percent.