Bankruptcy

After Firing its CEO, Treasury Dept Pushes GM to File Bankruptcy

By mcbride

While it may be the best idea for saving GM, some still wonder about the role of the federal government in compelling a ?private? company to file for chapter 11. 

?WASHINGTON (Reuters) - The U.S. Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by June 1, even though the automaker has publicly stated it could reorganize outside of court, The New York Times reported on Sunday.

GM is operating under emergency U.S. government loans. It has been told by the Obama administration’s task force overseeing its bailout that it must cut costs and reduce its debts in order to continue to receive aid.

The White House-appointed autos task force has given GM 60 days to come up with a restructuring plan and it is trying to determine whether the automaker can be a viable company.

Quoting sources who had been briefed on the GM plans, the Times said the goal was to prepare for a fast “surgical” bankruptcy.?

Here is a link to this article: http://uk.reuters.com/article/motoringAutoNews/idUKIndia-39007920090413

Michael

Full post as published by Texas Lawyer Blog on April 13, 2009 (boomark / email).