A couple of interesting comments keep coming up in the Detroit bailout saga. This morning Bush repeated the "disorderly bankruptcy" line we've been hearing. But he said something else. He also said that the automakers had failed to "make the proper legal and financial preparations necessary" for an orderly bankruptcy (I'm paraphrasing). He also said that the short term of the newly announced loans will give the Big 3 "time to prepare for an orderly bankruptcy" and that the US taxpayers' loans will be repaid in 2009 if those terms were not met.
All of this raises for me a question that indicates the mismanagement of these companies may have been even worse than we know: What is wrong with the structuring of the automakers' secured obligations that a Chapter 11 proceeding would be "disorderly?" Are bondholders' priorities a legal mess for some reason?
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment