BUSINESS
05/02/2009 05:12 am ET | Updated May 25, 2011

Obama Admin Plans To Ease GM Into "Controlled" Bankruptcy

The government may seek to ease General Motors into what it calls a "controlled" bankruptcy, somewhere between a prepackaged bankruptcy and court chaos, by persuading at least some creditors to agree to a plan that would cleave the company into two pieces, according to people briefed on the matter.

Instead of signing on every creditor as is typically required in prepackaged deals, administration officials are using as leverage the promise of taxpayer financing. Many regard the government as the only lender willing to step up with money -- in bankruptcy or out.

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