General Motors' US rescue plan has ran into trouble after a large number of investors refused to exchange their debt for company shares.
The Detroit-based manufacturer had hoped to agree a deal in which $27 billion in unsecured debt was swapped for 10% stake of the company's stock.
However, bondholders rejected the move.
This means the company is more likley to enter into Chapter 11 bankruptcy when it meets the US government's Monday deadline to present a new restructuring plan.
GM's European division Opel and Vauxhall are also still waiting on the German government's decision to select a preferred bidder for the company. An announcment on the decision is expected to be made tonight.
The four bidders vying for the company are Fiat, Canadian car parts maker Magna, Brussels-based investment firm RHJ International, and the Beijing Automotive Industry Corporation.