Chapter 11

GM Files for Bankruptcy

After weeks of anticipation, the ax has finally fallen. GM officially filed for bankruptcy protection at 8 a.m. this morning. The purpose of the 101-year-old automaker's bankruptcy is to restructure the company into a leaner, less debt-ridden, viable company, the Obama administration said. The U.S. will invest another $30 billion in GM to bring the total aid to an even $50 million. The proposed restructuring leaves the U.S. with a 60 percent stake in the company, the governments of Canada and Ontario with 12 percent, a union health trust with 17.5 percent, and current bondholders with 10 percent. A group of bondholders is protesting the proposed plan, claiming that it unfairly favors the United Auto Workers.