Financial Dispatch: Banks plan to repay bailout money
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Andrew Torgan
CNN Financial News Producer
Financial giant’s American Express, J.P. Morgan Chase and Morgan Stanley have all announced plans to issue common stock in the hopes of quickly paying back taxpayer bailout money.
J.P. Morgan and American Express disclosed plans late Monday to sell $5 billion and $500 million worth of stock respectively. Morgan Stanley followed that up this morning with its own plans for a $2.2 billion offering.
J.P. Morgan was one of the first major banks to get government money when it accepted $25 billion from the Treasury Department's $700 billion Troubled Asset Relief Program back in October.
Interactive map: GM's sphere of influence around the globe
A look at GM's plants and manufacturing employees, as well as suppliers and retirees, in the United States and around the world.
GM bankruptcy: End of an era
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Chris Isidore
CNNMoney.com senior writer
General Motors filed for bankruptcy protection early Monday, a move once viewed as unthinkable that became inevitable after years of losses and market share declines capped by a dramatic plunge in sales in recent months.
The bankruptcy is likely to lead to major changes and job cuts at the battered automaker. But President Obama and GM CEO Fritz Henderson both promised that a more viable GM will emerge from bankruptcy.
In the end, even $19.4 billion in federal help wasn't enough to keep the nation's largest automaker out of bankruptcy. The government will pour another $30 billion into GM to fund operations during its reorganization.
Taxpayers will end up with a 60% stake in GM, with the union, its creditors and federal and provincial governments in Canada owning the remainder of the company.
The 31-year-old in charge of dismantling G.M.
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David E. Sanger
The New York Times
It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.
But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.
Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.
What bankruptcy could do for GM
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Jay Westbrook
Special to CNN
The screams produced by the Chrysler bankruptcy are nothing compared with the howling that will accompany General Motors' bankruptcy filing as various creditors claim that the case is going too fast and their rights are being trampled.
But rough justice in the interest of speed is a common trade-off in the world of bankruptcy. The real question is whether even Chapter 11 of the bankruptcy law can quickly process a company the size of GM.
Bankruptcy has two central purposes: maximization of value (including community values) and fairness of distribution of that value. The number one job is to preserve the largest possible pie, then to figure out who gets what slice.
U.S. to own 60 percent of GM, government says
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CNNMoney.com
General Motors, the nation's largest automaker and for decades an icon of American manufacturing, stood on the brink of a bankruptcy filing and a de facto government takeover today.
A bankruptcy petition will be filed at 8 a.m., according to a source with direct knowledge of the bankruptcy proceedings.
President Obama will address the nation shortly before noon on Monday to explain the rationale for the filing and his hopes that this is the best route for a turnaround, two officials close to the situation told CNN.
"Today will rank as another historic day for the company - the end of an old General Motors and the beginning of a new one," the administration stated in documents released Sunday.
Financial Dispatch: GM strikes deal with bondholders
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Andrew Torgan
CNN Financial News Producer
The Treasury Department and a committee of major bondholders at General Motors have reached a deal that could give creditors a larger stake in GM than previously offered - as long as they agree not to fight the government's plans for a quick bankruptcy at GM.
The agreement, revealed in a SEC filing by GM early today, would essentially give the bondholders 10% of the company but also give them the rights to buy an additional 15% of the company's stock at a low price.
The deal is unlikely to allow GM to avoid bankruptcy, however.
In fact, the new offer is structured so that the assets of GM that would remain in bankruptcy would receive a 10% stake in a "new GM" that would be used to pay bondholders. The “old GM” would also technically receive the right to buy the 15% stake in the new company that emerges from bankruptcy.
Down to the wire...
Program Note: Tune in tonight to hear more from Ali Velshi on AC360° at 10 p.m. ET.
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Ali Velshi | Bio
CNN Chief Business Correspondent
It's down to the wire for GM.
The nation's biggest auto maker has until Monday to come up with a viable plan to save itself, or the government will force it into bankruptcy like it did Chrysler.
But the time probably doesn't matter.
GM's bond holders (the people who lent the company money) refused a deal to swap their debt for part ownership in the ailing company.
GM paid its hourly staff today, instead of Friday, and word is many suppliers have also been paid, paving the way for the company to file for Chapter 11 bankruptcy protection before this week is out.
I'm on my way to a bar, ironically called "bamboozled" across from a GM plant in the Detroit suburb on Warren, to talk to workers about the fact that the end of their careers may be near.
Sadly, I have made this trip to Michigan too many times. I'm rarely here for good news.
The irony is that this trip WASN'T for the GM story; it was to go for a ride around the test track with Ford CEO Alan Mulally about his (somewhat successful) efforts to turn that company around. Right now, he's a bit of a shining light in Detroit.
We'll bring you parts of that discussion later this week.
GM moves step closer to bankruptcy
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Chris Isidore
CNNMoney.com senior writer
General Motors said Wednesday that it has fallen far short of the bondholder support it needed for its proposed debt-for-stock offer, virtually guaranteeing that the nation's largest automaker will be forced to file for bankruptcy court protection within the next five days.
The bondholders were not satisfied with the prospect of owning only 10% of the company when the U.S. government would own nearly 70% and a union-controlled trust fund up to 20%.
The bondholders own $27 billion in corporate notes. GM (GM, Fortune 500) needed owners of 90% of those bonds to accept stock in return for the debt in order to reduce its interest expenses to a more manageable level.
Financial Dispatch: Deadlines loom for GM & Chrysler
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Andrew Torgan
CNN Financial News Producer
It’s coming down to the wire for General Motors.
With GM rapidly burning through its cash reserves due to hefty losses amid an historic slump in auto sales, President Obama said the Treasury Department would give the automaker the cash it needs to continue operations on the condition that GM restructure its debt or file for bankruptcy by June 1.
And the automaker a midnight deadline for its bondholders to reach a restructuring agreement.
GM’s chief executive officer Fritz Henderson has repeatedly said that the difficulty in inking a deal makes a bankruptcy filing for the automaker "probable."
A spokeswoman for GM last week said the company continues to plan for a bankruptcy, which is the likely next step if no agreement is reached.
Chrysler, dealers on edge
And Wednesday is judgment day for Chrysler and hundreds of auto dealers, when their fate could be decided in bankruptcy court. But some experts think it's already a done deal.
The federal judge in Chrysler Chapter 11 case could decide on May 27 whether the automaker can pull its choice assets - its best-performing factories and dealerships - out of bankruptcy and sell them to a newly-formed incarnation of itself, called Chrysler Group.
