Tim Higgins | New York | June 1

Detroit Free Press - General Motors Corp., which for much of its 100-year life was the world's largest automaker and the pinnacle of corporate America, has filed for bankruptcy reorganization in an attempt to rebuild itself as a smaller and leaner automaker.

The Detroit automaker, which has been staying afloat with more than $19 billion in U.S. government loans, has seen its U.S. sales drop nearly 50% so far this year, hit hard by the worst economy since the Great Depression.

The U.S. government has promised to shepherd GM through Chapter 11 in a plan that will see the company sell off its good assets to a new GM, while the less desirable assets are expected to remain in bankruptcy to be liquidated. The U.S. Treasury plans to provide an additional $30 billion to finance GM during its bankruptcy.

That will bring the total amount of federal money lent to GM to around $50 billion.

New York Times, By DAVID E. SANGER, JEFF ZELENY & BILL VLASIC, June 1

General Motors filed for bankruptcy on Monday morning, submitting its reorganization papers to a federal clerk in Lower Manhattan.

G.M. said it had $82.3 billion in assets and $172.8 billion in debts. Its largest creditors were the Wilmington Trust Company, representing a group of bondholders holding $22.8 billion in debts, and affiliates of the United Auto Workers union, representing nearly $20.6 billion in employee obligations.

The filing itself seemed anticlimatic. It was a simple procedure done thousands of times each day across the country, by individuals and business alike. But not usually, as in this case, by companies like G.M. that have woven themselves into the fabric of America culture.

The company was forced into the filing by President Obama, who is betting that by temporarily nationalizing the onetime icon of American capitalism, he can save at least a diminished automaker that is competitive.

With the filing, G.M. follows its crosstown rival Chrysler in bankruptcy. And G.M. hopes that it can move as swiftly in its reorganization. Chrysler, which sought court protection on April 30, could emerge in the next few days; a bankruptcy judge in New York gave approval on Sunday night for most of its assets to be acquired by Fiat.

Apparently, about 975 of GM's bondholders agreed to the restructuring they sought, holding just over 50% of the debt.

The other one hundred thousand+ bondholders, including individuals who had their children's college funds and personal retirement savings in this debt, had no say, did not vote for this action, and in fact oppose it.

They will be wiped out, recovering about ten cents on the dollar.

Under bankruptcy law it is generally true that a "significant" majority of the debtholders must agree to restructuring, not a razor-thin majority...