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Politics : American Presidential Politics and foreign affairs
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To: TimF who wrote (35519)5/13/2009 9:54:44 AM
From: DuckTapeSunroof  Read Replies (2) of 71588
 
That is how the federal bankruptcy code is written.

That language has been unchanged for many years.

(So, nothing 'changed' with this particular episode.)

ANY party to the bankruptcy filing can propose any damn plan for reorganization that it wants to! :-)

(But --- since this is a chapter 11 filing, and unless the Judge decides that chapter 11 reorganization is not possible/viable as an option and rejects all the plans --- then LEGAL PRIORITY is given to reorganization plans which are aimed at achieving the desired goal of the Court: shedding enough debts and restructuring the business sufficiently so that a VIABLE NEW BUSINESS rolls out the other side of the bankruptcy action.)

That (crafting a viable business that can stand on it's own two feet) is the PRIMARY GOAL of the Court. While paying off creditors is only a secondary legal goal.

And --- since the goal is to create a revitalized business, and that requires a whole lot of new cash --- the Court gives preference to *any plan for reorganization* which "puts it's bucks where it's mouth is"... which comes to the table with Billions in fresh cash to help the company survive long enough to be restructured. (So that is why the Court is showing deference to the federal government's proposed plan of reorganization --- because Uncle Sammy is not only the largest creditor, but also the ONLY participant in the action who is willing to inject Billions in fresh cash, willing to assume the legal role of "debtor-in-possession".

Any of the other creditors could have easily taken the lead if they had wanted it badly enough... but none of them wanted to put any money into reorganizing Chrysler. (This is a case where - legally - "Money talks and BS walks". :-)
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