DETROIT (WXYZ) - Word is emerging about a plan that could split General Motors in two, if the company files for bankruptcy.
MARY CONWAY REPORTS IN THE VIDEO PLAYER ON THE RIGHTUnder what is being called a "controlled" bankruptcy, the company would be split into its good assets and its bad assets while in bankruptcy protection. The good assets would then be able to quickly emerge from bankruptcy as a new company, financed by the government. The bad assets would be kept in bankruptcy longer, and money earned from the "sale" of the new company could be used to settle General Motors' debt.
Analysts say the good assets could include Cadillac, Chevrolet and the assets the company needs to run its business. The bad assets could include Hummer, Pontiac and underperforming factories.
The "controlled" bankruptcy would be similar to what happened when financial giant Lehman Brothers failed late last year. A day after filing for Chapter 11 protection, the securities firm agreed to sell the bulk of its North American business to Barclays Capital, the British bank. The sale was completed in a little more than three days.
Details on the possible plan are still being discussed, and nothing has yet been decided.
