The market has been laying odds for weeks that General Motors (GM) would enter Chapter 11. Over the last few days, the filing looked like a sure thing. According toBloomberg, the final decision has been made and GM will go to court on June 1. The news service writes, "General Motors Corp., which celebrated its 100th anniversary last year, plans to file for Chapter 11 bankruptcy protection June 1 and seek a sale of most of its assets to a newly formed company."
While the move will lower GM's labor costs and cut obligations to it creditors, it may not do much more than that. The company's bondholders have decided to trade their obligations for 10 percent of GM with a warrant option to buy five percent more.