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Politics : American Presidential Politics and foreign affairs
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To: TimF who wrote (44638)8/3/2010 7:47:25 AM
From: DuckTapeSunroof  Read Replies (1) of 71588
 
Re: [It is called "Debtor in Possession" status.] "Call it anything you want"

I call it the law.

And, NOTHING NEW.

It has long been a feature of American bankruptcy law and ENTIRELY CONSISTENT with the main purpose of American bankruptcy law (not the same as some foreign laws...) to craft a strong commercially viable enterprise out of the ashes of it's previous commercial failure... and ONLY OF SECONDARY PURPOSE is the maximization of returns for earlier debtors.

When push comes to shove the American process is supposed to favor creating a viable enterprise over the 'sanctity' of debts.

Re: "I'm not disputing the doctrine, I'm disputing the idea that the government becoming the "debtor in possession" was a good idea"

Hey! NOBODY ELSE was willing to step up to the plate with the big bucks required to speed the bankruptcy process along so that there would still be a viable business at the end of the process!

GM would have dissolved by now... over 2 million jobs would have been DIRECTLY LOST (with God only knows what other effects that would have caused to the economy at the depths of the Great Recession... most likely the loss of confidence and tax revenues and unemployment spike and knock-on effects would have kicked us into Depression.)

C.B.O. just reported that the DIRECT COSTS ALONE of allowing the failure (lost tax revenue from the lost paychecks and the unemployment costs) would have already EXCEEDED what the government injected in funding... much of which (all of which for GM, perhaps not all for Delco...) will be repaid.
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