Posted on 07/08/2009 8:50:31 AM PDT by mojito
Almost every bankruptcy expert The Am Law Daily talks to agrees that the super-fast General Motors and Chrysler bankruptcies diverted from traditional bankruptcy law because of the government's huge role in each case and the danger liquidation might have posed to the broader economy.
What they don't agree on is whether the cases set a meaningful precedent for future judges. "What happened in GM and Chrysler is so outrageous and so illegal that until March of this year, nobody even conceptualized it," says Lynn LoPucki, a bankruptcy expert at UCLA Law School. "Wouldn't almost every company like to get out [of bankruptcy] in 30 or 60 days? Is there any reason they cannot all propose to do what GM and Chrysler have now done?"
....
Several other experts and Am Law 100 partners echoed LoPucki's concerns, though no one else directly labeled the sale illegal. But their basic views are the same: The courts stretched section 363 of the bankruptcy code--which allows a company to sell its best assets to a new buyer rather than go through a complete reorganization--beyond the code's intentions.
(Excerpt) Read more at amlawdaily.typepad.com ...
The debt/bankruptcy was one of the topics.
Again, what is the avenue to profitability, let alone the Gov't and UAW have such equity stakes when do they sell to recoup, and who will buy it?
My gnome also noted the Canadians did more of a 50/50 for gov't UAW vs. what we did.
I do not see these failed models working.
Got to hear this guy in Dennis Miller that the functional will triumph over dysfunctional models. http://www.clarkwinter.com/
GM and Chrysler are Dysfunctional models on federal life support. As my gnome noted, normal purging of liabilities did not occur , i.e. pensions, and lawsuits. With that in mind even though Ford may be carrying more debt, Their VEBA liabilities may be more of a known vs. unknown since the new company equity is so intertwined with the UAW and the VEBA. And what profitability will GM and Chrysler actually have if the 1/4 reports are not forthcoming if they are not transparent via the Gov't let alone they do not look like they have any product coming for at least 2 or 3 years....
Obama owns this mess....
I’ve been a Chevy man for years and years but I Will Never Buy A Governemnt Motors/UAW Automobile or Truck Again!
If no one is willing to buy it, it's worth zero.
And it's just starting.
Just part of the end of America as we’ve known it.
that’s saying something, since I would guess most bankruptcy law professors lean debtor-friendly.
My wife works for Northwest Airlines (now Delta). They went through bankruptcy more than a year ago. They came out of it a very different company. Much leaner and the union agreements were totally redone at a much lower level (my wife lost 40% of her pay).
I have heard very little of any actual restructuring of GM. I would expect to hear howls of anguish if the unions lost anything of substance. The company will continue to lose billions of dollars for many years to come.
Now that GM is owned by the government, can it go into bankruptcy in the future? If I were a supplier to GM I would demand payment upfront at the time of purchase. Will the government force suppliers to make parts for GM?
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