Almost two months later, GM's advisers presented what were expected to be the final two bids for majority stakes in GMAC to the board. KKR, with Wachovia Corp. (WB ), had submitted a highly conditional letter and term sheet. By contrast, Cerberus, which had code-named the GMAC deal "Hercules," had marked up every section of a purchase agreement and had spent tens of millions of dollars for roughly 300 people to pore over 8,000 GMAC files and other documents.

KKR still wouldn't let up. In late February it rounded up a group of blue-chip partners that might eventually get GMAC the investment-grade rating it wanted -- General Electric (GE ), Wachovia, Merrill Lynch (MER ), and the Bank of Nova Scotia (BNS ). But that didn't deter Cerberus. Not long after, Feinberg, notorious for his hatred of traveling far from his Park Avenue office, met Wagoner in Detroit in mid-March. His partner, Citigroup CEO Charles O. Prince III, also went to visit Wagoner on Mar. 23 to personally vouch for Feinberg.

Feinberg badly wanted the deal. Just weeks before the board met to make its final decision on Mar. 26, one Cerberus partner decided not to contribute $1.5 billion to the deal. Feinberg impressed the carmaker by saying he would not cut the price -- and his firm would make up the difference.

By the time KKR tried to bust its way back in, "it was almost no contest," says someone close to the board. "I don't think there is any other financial institution in the world that would have done this deal." That's a fact -- for better or for worse.

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