GM announced on Thursday it had reached a deal with several major bondholders that would give them a bigger stake in a reorganized automaker. In an interview with TheDeal.com, Jeff Marwil, a partner at Proskauer Rose LLP, lays it out straight. He argues that even though GM may have reached a deal with some major bondholders that could pave the way for a fast-track bankruptcy backed by the U.S. Treasury within days, there is no guarantee the agreement will lead to a speedy bankruptcy process.
“It’s not a deal if it’s only 20% of the bondholders agree, and it doesn’t mean the plan will succeed. It just means the government has support now from some bondholders, and bankruptcy now seems like a foregone conclusion,” Marwil explained.
“I think the greatest challenge will be doing it right the first time and emerging from bankruptcy poised for success. Who knows how long the bondholders will fight? This will be the biggest bankruptcy ever so there are a lot of issues to get resolved,” he said. [via Dealscape]
