June 1, 2009Monday…How About a Little Bankruptcy to Start Your Week?
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photo via http://www.sportscarcup.com
GM will file for bankruptcy protection today…
“The bankruptcy, to be filed in New York, is a moment of reckoning for an industry that was once at the heart of the American economy. It culminates a remarkable four months of confrontation between Washington and Detroit that is expected to result in a drastic downsizing of the company. (New York Times)”
“GM plans to name turnaround executive Al Koch to serve as its chief restructuring officer to help the company through bankruptcy protection. Koch, a managing director with AlixPartners LLP, is a veteran turnaround specialist who helped Kmart Corp. through its Chapter 11 reorganization. (Chicago Sun Times).
“The once proud and dominant company, which owned half of the American car market at its peak, was finally brought to its knees by the recession and frozen credit markets, forcing GM into the arms of the federal government. But the money the government gave to keep GM upright—$19.4 billion to date and as much as $30.1 billion more down the line—came with big strings. President Barack Obama wanted GM to completely restructure so it could become competitive again. The only way to get the savings the carmaker needed from bondholders and its sprawling dealer network was under the umbrella of court supervision. (Businessweek).”
