Bankruptcy

The real risk to the future of General Motors (other than the unpopular vehicles) is that a bankruptcy and reorganization process would not be quick, in what’s called a 363 sale, but would go through a standard Chapter 11 reorganization, which could take several years. A long and drawn out reorganization would probably have an [...]

The Washington Post reports that the Detroit automaker is on its way to joining Chrysler in bankruptcy proceedings:
The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing as the [...]

A central component of the Obama administration’s economic strategy was abandoned by the White House in the days leading up Senate vote, giving political cover to opposing Democrats.

It comes as no surprise that the hedge funds in control of Chrysler’s debt are lashing out at President Obama for fingering them yesterday as the primary reason a Chrysler bailout deal fell through. Indeed, The Washington Post has an eye-opening piece this morning about how those secretive funds feel like they’ve been asked to [...]

Sen. Dick Durbin (D-Ill.) took to the Senate floor on Thursday and talked about the implications of Congress’ cave to the banks on his mortgage “cramdown” proposal, which would have allowed bankruptcy judges to reduce loan amounts and keep borrowers out of foreclosure and in their homes. Durbin eloquently summed up the way Congress has [...]

The “cramdown” provision meant to help desperate homeowners falters in the Senate, revealing the financial industry’s power on Capitol Hill.

James Scurlock, director of “Maxed Out,” a groundbreaking documentary on consumer debt, steps up to defend TARP oversight panel head Elizabeth Warren today in The Big Money. Scurlock says that “no one grasps the true nature of our hard times” better than Warren, a longtime scholar of consumer debt and bankruptcy.

Automotive News reports that if GM is forced to declare bankruptcy, the federal government could be forced to take on the burden of paying for the pensions of tens of thousands of retired autoworkers:
A General Motors bankruptcy could become a nightmare for the federal government’s Pension Benefit Guaranty Corp.
That’s because the automaker could dump as [...]

Abandoned and vacant homes rapidly piling up in neighborhoods around the country serve as symbols of the secondary damage caused by the foreclosure crisis — a catastrophe felt on the ground but still unseen by Washington.

House Democrats introduced legislation yesterday designed to stem the foreclosure crisis, including a provision empowering bankruptcy judges to alter the terms of primary mortgages — an option homeowners don’t have under current law.
The move comes less than a week after President Barack Obama unveiled his own sweeping plan to tackle the housing market collapse, which [...]