The Obama administration is preparing to move General Motors into bankruptcy as early as next week under the terms of a plan that would give GM tens of billions of dollars more in government financing, the Washington Post reported.
Under the GM draft bankruptcy plan, the automaker would receive just under $30 billion in additional federal loans, a source told the Post, which would up the government's overall investment in the company to nearly $45 billion.
The move comes as the administration prepares to lift Chrysler from bankruptcy protection as soon as next week, industry sources told the paper.
But a large obstacle remains for GM, which must still make an agreement with investors who hold $27 billion worth of company bonds, the Post reported.
Choosing bankruptcy is viewed by some as the best means of reviving the companies, the Post reported. But the speed of the administration's moves has triggered complaints that the rights of investors and dealers are being trampled. Meanwhile, fears that a bankruptcy could lead to cascading business failures are spreading throughout GM's vast chain of suppliers.
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