General Motors will quickly go bankrupt to quickly buy its best assets

According to the New York Times Sunday report, despite General Motors’ public contention that it could still reorganize outside court the U.S. Treasury is directing GM's Corp. to lay the groundwork for a bankruptcy filing by a June 1 deadline. 

Aiming to prepare for a fast "surgical" bankruptcy members of President Obama's automotive task force are holding ongoing meetings and conference calls with GM officials and their advisers in Detroit and Washington. These preparations are carried out to assure a GM bankruptcy filing is ready if the company is unable to reach agreement with bondholders to exchange roughly $28 billion in debt into equity in GM and to get needed concessions from the United Automobile Workers union.

Treasury officials are scrutinizing the potential way out, that means the "good GM" enters and exits bankruptcy protection within just two weeks, using $5 billion to $7 billion in federal financing. As much as $70 billion in government financing and possibly more may be required to resolve the automaker's health-care obligations and the liquidation of the factories.

One way is to create a new company that is to buy the "good" assets of GM almost immediately after the carmaker files for bankruptcy. And less desirable assets, including unwanted brands, factories and health-care obligations, would be remained in the old company, which would possibly be liquidated over couple of years.