GM Preps for Possible Bankruptcy

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    Fritz Henderson, GM's new chief executive who replaced Rick Wagoner in late March, said bankruptcy is a possibility for the ailing automaker.

    U.S. officials are pushing General Motors to prepare for a bankruptcy filing ahead of the June 1 deadline, according to a report.

    GM insists publicly that it can reorganize before that date, but the auto company -- which was granted $13.4 billion in federal aid -- spent last week in talks with members of Obama's automotive task force discussing how to prepare for a "surgical" bankruptcy, the New York Times reported.

    The preparations are meant to assure that the company is ready to file for bankruptcy if GM cannot reach an agreement with bondholders to change $28 billion in debt into equity, the paper reported.

    Fritz Henderson, GM's new chief executive who replaced Rick Wagoner in late March, said bankruptcy is probable for the ailing automaker if it cannot reach a deal with labor and bondholders by a June 1 deadline, imposed by the administration.