As the Tuesday deadline approaches for GM and Chrysler to present a restructuring plan to the government for additional federal loans, it is being reported that the company is considering a chapter 11 bankruptcy filing to create a new company and sell undesirable assets. GM had no comment on the claim.
Although I am not too familiar with bankruptcy laws, a chapter 11 would give more leverage for GM to sell assets and negotiate contracts with existing employees. However, such plan would be hardly acceptable for law makers as the company receives additional federal loan just to make the chapter 11 process smoother. What a crisis it is.
