Is GM a GC?

I see the auditors have raised "substantial doubts" as to whether GM can continue as a "going concern" (link). That should hardly surprise anyone who understands that two GM shares will cost you less than a latte. I would assume that GM stock is already trading as an out-of-the-money call option, with liabilities in excess of assets.

But I want to go under the hood of the "going concern" model I take it as plausible/likely that GM cannot service its current debt at its current income. But consider a favorite classroom example: LittleCo with liabilities of $100. Its assets are worth $80 as a going concern or $60 in liquidation.

The point is that the creditors may have an incentive to preserve the going-concern value even if it is not enough to service all their debt, and even if all old equity owners will be wiped out. So, just cancel old securities and issue new equity to old debt. Happens in bankruptcy all the time.

I could be wrong, of course: could be that GM is operating-insolvent, losing money on every deal even before debt service. In that case, Liq>GC, and the best thing to do is to put a bullet through the poor beast. This happens: I think it is a fair description of the old Penn Central company, an absolute loser as a railroad (without government subsidy) but a highly profitable real estate holding entity. But I doubt that this is the case with GM.