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  • A "Surgical" Bankruptcy for GM?

    Bankruptcy law is rich with colorful vernacular: cram-down, strip-down, haircut, matrix, etc. But until a few weeks ago, nobody had ever heard of a “surgical” bankruptcy, the Obama Administration’s preferred term for a very big business, like General Motors, whizzing through bankruptcy in just a few weeks flat, rather than the normal year or year-and-a-half for a speedy case.

    Whatever it means, most bankruptcy attorneys agreed that it couldn’t be done. After all, if a single party–creditor, unions, dealers–objected to anything at all, it could take months to reach a resolution.

    But the Obama Administration is more creative than that. It recognized that, in bankruptcy, most parties are squabbling to get paid what they’re owed, so if you put in a pile of money, there’s less squabbling.

    So how much money? Today’s N.Y. Times reports that the Administration foresees as much as $77 billion in government financing–over $300,000 per GM employee.

    That, apparently, is a “surgical” bankruptcy.

    Let us join the Administration in coining a new term: “bankrupcy lite.” The definition: “A half-hearted reorganization in bankruptcy orchestrated for speed rather than long-term durability and financed with taxpayer dollars. A bailout disguised as a bankruptcy.”

    Posted in Economics [slideshow_deploy]

    One Response to A "Surgical" Bankruptcy for GM?

    1. NELSON GONZALEZ,FENT says:

      GENERAL MOTORS, WILL SOON BE A THING OF THE PAST. I DON'T KNOW OF ONE THING THAT THE GOV'T FEDERAL, STATE OR OF ANY KIND HAS DONE ANYTHING WELL ENOUGH TO MAKE MONEY OR DO IT RIGHT. THE POLITICIANS IN WASHINGTON SHOULD DO US ALL A FAVOR, GET OUT AND LET THIS NEW MANAGEMENT FIND A WAY OUT ON IT'S OWN. WE WILL SURVIVE. I CAN'T IMAGINE PEOPLE APPOINTED BY WASHINGTON HAVE A CLUE OF WHAT NEEDS TO BE DONE. THEY WILL PUT TOGETHER SOMETHING THEY CAN MANIPULATE TO COMPLY WITH THEIR AGENDA. FOURTY THREE YEARS OF MY LIFE AND OF MANY OTHERS, HARD WORK WASHED AWAY…MAYBE WE SHOULD PLAY THE SONG FROM SOUTH PACIFIC…I'M GOING TO WASH THAT COMPANY RIGHT OUT OF MY HEAD. GOOD NIGHT AND GOOD LUCK!!!!

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