Bondholder accord clears way for GM's 'prepackaged' bankruptcy

General Motors Corp., the world’s largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said.

GM’s path will be smoothed by an accord Thursday giving some of its biggest bondholders an equity stake in the reorganized automaker. The U.S. Treasury is requiring that an unspecified percentage of debt holders accept the terms by 5 p.m. Eastern time Saturday, Detroit-based GM said in a regulatory filing.

“If bondholders agree to this up front, this would essentially be a prepackaged bankruptcy,” said Shelly Lombard, an analyst with New York-based bond research firm Gimme Credit LLC. “GM could exit Chapter 11 faster.”

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