GM Faces June 1 Bankruptcy as Bondholders Reject Debt-Swap Deal

The Treasury Department will receive about 70 percent of the new G.M., while the United Automobile Workers union will hold 17.5 percent through its retiree health care fund.

That is less than half of the stock that the U.A.W. originally was slated to receive under plans drafted earlier this spring.

The company said the number of bondholders accepting the proposal fell "substantially short" of the 90% required for approval and that the offer had lapsed. Its shares fell sharply, dropping 9% to $1.31 in the first hour of trading on Wall Street.

Details on how many jobs GM plans to cut and which factories are slated to close are likely to surface at the meeting, hastily assembled to allow local leaders to get voting by members complete by Thursday.

The gathering comes hours ahead of the deadline for GM's debt exchange offer to bondholders, who have until midnight to decide whether to agree to give up $27 billion in debt for a collective 10% stake in a restructured GM.

From a cultural standpoint, watching GM slide into probable bankruptcy with its dealer network shattered and one of its oldest brands, Pontiac, banished from the field is like being on the French border in 1812 and watching the remnants of Napoleon's Grand Armée return starved, frozen, and wrecked from their disastrous foray into Russia.