Executives prepare for Chapter 11 filing on Monday
31 May 2009

General Motors executives are making the final preparations for a Chapter 11 bankruptcy filing tomorrow.

At a meeting on Sunday, they were reported to be firming up the details of how to completely restructure what was once the world's largest car company.

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The anticpated bankruptcy filing will be the third largest in US history, following Lehman Brothers' collapse and the failure of telecoms giant WorldCom.

GM is expected to use the court protection to split in two - "Old GM", with all the "bad" assets like defunct car plants - and "New GM", which will own the "good" assets such as viable factories and brands like Chevrolet and Cadillac.

GM Europe, which has entered final negotiations for a sale to Canadian car parts firm Magna, will not be affected by the filing.

President Barack Obama is now expected give full details of the restructuring on Monday. GM has received around £12 billion in government aid since the financial crisis struck.

GM, was once the largest company in the world, but has been driven to bankruptcy because of high production costs and by the collapse in credit markets and consumer spending. It lost $30 billion (£18.5 billion) last year.

Meanwhile, a US bankruptcy court judge in New York is expected to approve a deal between US car maker Chrysler and Italy's Fiat on Monday.

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