General Motors ( GM) bondholders say they are encouraged that President Barack Obama agrees "that GM's current restructuring plan is not viable," but they aren't exactly buying into Obama's plans for the company either. Many see the bondholders as a roadblock on the path to creating a viable company outside of bankruptcy court, where a judge could impose a solution on them. The group, which holds about $27 billion in GM debt, is unhappy with the federal government's expectation that it trade two thirds of that debt for stock. In a statement released Monday afternoon, the bondholders said they will trade "a substantial part of their debt for equity, but that exchange must occur in support of a business plan that has a chance to succeed" so that its "securities have real value." In seeking a viable plan, the group is on board with the administration. However, the statement also indicates that bondholders might prefer bankruptcy to accepting the proposed exchange formula. Bondholders want "to configure an exchange that will maximize the chances of a successful out-of-court restructuring (since) all parties seem to agree that an out-of-court restructuring would be the preferred path to viability," the statement says. It seems clear that the administration and the bondholders are headed into intense negotiations in which both sides will seek to achieve their goals by threatening to encourage a bankruptcy filing, something neither side really wants.