General Motors: $172.8B in debt — the largest US industrial bankruptcy

General Motors was founded in 1908 by William C. Durant and became the world's largest automaker, dominating the industry for most of the 20th century. At its peak GM held roughly 50% of the US market and employed over 600,000 people worldwide. By 2008, decades of legacy costs, pension obligations, and an uncompetitive product lineup had left it structurally weaker than Japanese rivals. The 2008 financial crisis turned chronic weakness into acute crisis: US vehicle sales collapsed from 16.1M to 10.4M in two years, and GM was burning cash at $2.5B per month.

In December 2008, the Bush administration provided GM $13.4B in TARP loans to prevent a collapse that would have eliminated over a million jobs across the supply chain. The Obama auto task force demanded a credible restructuring plan. CEO Rick Wagoner was forced to resign on 29 March 2009. By 1 June 2009, GM could not reach a deal with bondholders and filed for Chapter 11 in Manhattan federal court — the fourth-largest US bankruptcy by assets ($82.3B) behind Lehman Brothers, Washington Mutual, and WorldCom, and the largest industrial bankruptcy in history. Total debt was $172.8B.

The restructuring was a 363 sale: a new company, NGMCO Inc. ('New GM'), purchased GM's profitable assets — brands, plants, technology — while the old GM retained toxic assets for liquidation. The US Treasury took 60.8% ownership of New GM; the Canadian and Ontario governments took 11.7%; the UAW retiree health trust took 17.5%; unsecured bondholders received 10%. GM emerged on 10 July 2009 — 40 days after filing — having shed $77.7B in debt.

The federal government invested roughly $51B in GM. By December 2013, it recovered $39B through the sale of its GM stake, for a net loss of approximately $11B ($10.5B for GM, $1.5B for GMAC/Ally). The reorganized GM cut 22,500 US jobs, closed 13 plants, and eliminated 900 of its 5,900 dealerships. In November 2010, New GM completed the largest IPO in US history at that time, raising $23.1B.