Quote:
Originally Posted by onewhippedpuppy
Why so few people realize this, I have no idea. Everyone thinks that bankruptcy means close your doors, which is not the case. Yes, people would lose their jobs. But ultimately the company that emerged would be more lean and efficient than before. BK is the only way these companies will sufficiently clean house to survive.
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If GM or Chrysler file Chap 11 BK now, they will not re-emerge. They will be liquidated and 1MM to 3MM jobs lost. Because there is no private entity willing/able to provide sufficient debtor-in-possession credit ($20-30BN?) to finance the restructuring. To successfully file and emerge from Chap 11, they will need govt support. This is the "pre-packaged BK" option that some advocate (I do). I think there is a good chance that will eventually happen. Or, something that essentially works like a Chapter 11 BK but just isn't called that. But right now, at the transition between Administrations and with very little time, looks like the best that Congress can do is a stop-gap to get the companies into 2009 when this will be dealt with. If indeed they can do that - the Senate Republicans seem solidly opposed.