According to WSJ, General Motors (GM) has hired bankruptcy lawyers and restructuring consultants to consider whether to file for bankruptcy protection as lawmakers in Washington DC continue to debate the terms of a possible bailout of the embattled carmaker.
The Journal reported late Thursday that GM’s management has tapped bankruptcy veteran Harvey Miller of the New York law firm, Weil Gotshal & Manges LP, to handle any potential bankruptcy filings. Others involved in the matter include restructuring veterans Jay Alix, Evercore Partners’ William Repko and Blackstone Group’s Arthur Newman.
GM has been burning through cash as the collapse in demand for vehicles and restructuring charges has left the company in a very difficult cash position. The automaker’s cash burn for the third quarter accelerated to $6.9 billion. GM has lost a combined $51 billion in the past three years. The company has said it will run out of operating capital next year if it doesn’t get government aid.
The reports come as a bipartisan group of senators reached a tentative agreement Thursday night on an emergency $14 billion bailout for General Motors, Chrysler and Ford (F), the Journal said.
Chrysler hired last week bankruptcy law firm Jones Day, anticipating that its counsel may be required if the $7 billion in government bridge loans it has requested are not approved before the end of current fiscal year. GM seem to be following that example.