Financial advisers to General Motors' have, in their letter to the Treasury and members of President Obama's auto task force, expressed their disappointment over the struggling automaker's proposed strategy of swapping debt for equity. They opine that the plan would likely result in "a bankruptcy that would have dire consequences."

Even though the advisers had put forth an alternative debt restructuring proposal on March 5, the automaker is trying to convince bondholders towards exchanging debt valued at $27.5 billion for $9.2 billion and equity in the company.

Emphasizing that the restructuring being considered by GM will not be able to garner enough acceptance to succeed on an out-of-court basis, the advisers from investment firm Houlihan Lokey wrote: "The result of such a failed exchange would likely be a bankruptcy that would have dire consequences for the company, the tens of thousands of hard-working Americans that GM employs and the economy as a whole."

Meanwhile, the distraught Detroit automaker GM is trying to race through with the restructuring plan - a requisite of the $13.4 billion federal bailout loan - as the March 31 deadline for getting concessions from union workers and debt-holders is just round the corner. The company requires reducing its $28 billion in unsecured debt by two-thirds as per the December terms set by the Bush administration.