The bond holders would’ve had to give up 40% of the restructured automaker to the United Auto Workers, while they would’ve gotten just 10% for their risky investment. Who could’ve possibly predicted that they might balk at that offer? Oh right, any one with half a brain.

General Motors (GM) said Wednesday that not enough bondholders agreed to an exchange offer, which expired at midnight Tuesday, to make the deal go through. GM’s board of directors will meet shortly to discuss the next step.

The automaker was attempting to persuade bondholders to trade in $27.2 billion in unsecured public debt notes in exchange for a 10% stake in the restructured automaker. GM needed 90% of bondholders to agree to the plan. On Wednesday, the automaker said the amount of notes turned in were “substantially less than the amount required by GM to satisfy the debt reduction requirement” set forth by the U.S. Treasury.

“Since these conditions, as well as certain other conditions, have not been satisfied, the exchange offer will not be consummated,” the company said in a statement released Wednesday morning.

GM needed to get the deal done in order to qualify for more loans from the U.S. government. Now, it is facing filing for bankruptcy any time before June 1, its deadline set by the government to get certain restructuring moves completed.

Hi ho! Hi ho! It’s off to bankruptcy GM goes.

Seriously, the offer was one major crap-sandwich that made the Chrysler deal appear that investors won a corporate version of Powerball. The union would’ve received 2/5ths of the reworked automaker for a significantly smaller loss than the investors who would wind up with 10%.

The investors weren’t willing to simply hand over their marbles, instead allowing the bankruptcy court to handle the case. Good for them. Now they just have to hope that the Obama Administration won’t try to destroy them through the press corps, as was threatened against the Chrysler investors.