- The Washington Times - Wednesday, May 6, 2009

NEW YORK (AP) | GMAC Financial Services said Tuesday that it will not automatically be forced to file for bankruptcy protection if General Motors Corp. is unable to restructure itself by its government imposed deadline.

Robert Hull, the company’s chief financial officer, said that while a Chapter 11 filing at the automaker would certainly have a negative effect on GMAC, the two remain separate companies and don’t guarantee each other’s debt.

“We want to see GM succeed, that’s for sure, but we’re taking the steps we need to prepare GMAC for whatever happens,” Mr. Hull said during a conference call with investors.

GMAC said Tuesday that its first-quarter loss widened to $675 million from a loss of $589 million in the same period last year, blaming the effects of the continued weak economy and losses related to its older automotive and mortgage loans.

The company, which provides financing for GM dealers and customers, struggled for much of last year, as the collapse in the housing and auto markets battered its traditionally lucrative home and vehicle loan business.

In late 2008, GMAC completed a debt exchange program designed to raise capital and allow it to become a bank holding company. As a result, it has received billions of dollars in government aid.

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