Reports are swirling in the news media that the federal government will likely direct General Motors toward what is being called a "controlled" bankruptcy by getting some creditors to come on board with a plan that would divide the company in half.

Under the plan, GM would file for a prearranged bankruptcy, then, under Section 363 of the bankruptcy code, it would sell off its desirable assets to a new, government-financed company. These pieces would likely include Chevrolet and Cadillac, with Hummer and under-performing factories and assets left with the old company.

The New York Times, in an article by Michael J. de la Merced and Jonathan D. Glater, cites "people briefed on the matter" as a source for its account of the plan, which would be accomplished essentially through government leverage of a core group of creditors.

At a news conference in Detroit on Tuesday, March 31, Fritz Henderson, GM's new CEO, said, "By no later than June 1, if we're not able to accomplish this outside bankruptcy, we'll be in bankruptcy. It's pretty clear. The government was unequivocal."

In the past the government has not pushed companies into bankruptcy, but has rather stepped in when all other measures fail. The Obama administration, however, seems to have a goal of a new, healthy GM, free of its liabilities and less valuable assets.