Auditor: ?substantial doubt? over GM avoiding bankruptcy
GM?s recovery plan hinges on a number of variables, including a recovery in U.S. sales, concessions from unions, and renegotiating terms with debtholders. Should any of these fail to materialize, the company could be forced into bankruptcy relatively quickly, a company auditor has said.
?The corporation?s recurring losses from operations, stockholders? deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern,? auditors from accounting firm Deloitte & Touche LLP wrote in an annual report filed with the U.S. Securities and Exchange Commission.
In accounting, ?going concern? refers to a company?s ability to continue functioning. Companies are required to disclose in financial statements whether the company?s status is in doubt.
But the accountants aren?t the only ones expressing concern over the situation. GM was also candid in its assessment of the situation in the SEC filing.
?If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code,? the automaker said in the report.
?There is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn,? the company explained.
GM shares were down 15 percent Thursday morning on the news.
Great.... :facepalm:
So, uh, can I have a refund on my tax dollars, please?
AWESOME. $30B well spent.
EPIC FAIL
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