The Case For Chapt. 11 Bankruptcy For Carmakers
Professor G. Marcus Cole is quoted in the San Francisco Chronicle in an article that addresses whether chapter 11 bankruptcy restructuring might be the best option for the big three U.S. automakers to solve their financial problems:
Auto executives have painted a dire picture for their companies and the economy if they are denied $25 billion in federal loans and forced into bankruptcy.
Yet many legal experts say that Chapter 11 bankruptcy, which lets a company restructure its operations and shed or rework many of its contractual obligations, is the best option for the automakers and for taxpayers if federal money is involved.
"Their going-concern value is likely to exceed the cash value of their assets," says Stanford Law School Professor Marcus Cole.