What’s really disconcerting is that in a case of US taxpayer vs. institutional investor, so many taxpayers would side with the investors, and this is after the investors are more than fairly paid. You are right it’s brainwashing, just missed the part where you’re the victim.

What would be helpful is if those concerned would read about how these bankruptcies work. There’s quite a lot of material out there given they happen with some regularity. Failing that, listening to people who’ve at least done the very basic homework is a good idea.

In brief, the creditors are lined up to receive money from the recovery. Since GM has a lot of debt, and assets like car factories aren’t worth much if they’re not making cars, you have to be real close to the front of the line to get your money back. This usually describes chap7, but the S363 chap11 GM is using shares much of the same characteristics with their old assets “liquidated” and old creditors paid off.

As for contracts and legal claims in general, one of the main attractions of S363 is that the new company is free and clear of the burdens of the old one. They can continued whichever ones they need for operations going forward, but the argument is that since chap7 is the alternative, something is better than nothing. So unless someone can demonstrate chap7 is not inevitable (note this editorial ironically argues the opposite), or someone can significantly outbid the gov (no one did), the usual losers in bankruptcy are up the creek sans paddle.

That’s funny. I’ve been accused by posters here of being a Toyota employee, too.

For what it’s worth, I’m neither a Toyota employee nor a lawyer. As I have noted elsewhere, I do have some professional experience in dealing with business bankruptcies and have learned enough about the law to understand it, but I’ve hired lawyers to handle the actual cases.

Do you have a rebuttal to the factual aspects of my points? Is there something about NLRB v. Bildisco and Bildisco that makes you believe that dealer contracts can’t be terminated in a Chapter 11?

You two sound like a couple of henchmen from the PTFOA that go around to blog sites ironing out any wrinkles in efforts to keep the brainwash going strong. You’re probably just a couple of lawyers getting paid run electronic interference and smoke screen while big brother pulls off this caper. Keep up the good work

It does sound as if somebody hasn’t run the numbers.

In the case of GM, the secureds are getting all the cash on hand. If the case went into 7, there wouldn’t be anything for the little people at all.

It seems that there are some long-time bondholders who are shocked by this, and some small time speculators who bought recently who didn’t know what they were getting into. I pity the former for being naive. While I wish no ill upon the latter, there are times when people need to get schooled by their investments to learn from their mistakes; they screwed up, and it’s their own damned fault if they played it badly.

If you bought GM bonds with erroneous expectations for how the markets work, then consider it to be a learning experience that you can use for next time. Whenever you speculate on a company that is approaching bankruptcy, you have to plan for the risks associated with the play.

It’s funny a “bondholder” would desire this. Most likely they’re unsecured and would get nothing from chap 7 anyway.

As just described, it’s a ploy to delay and get taxpayer money to go away.

Resolving quickly is very much to the benefit of the taxpayers goals, and since there was no compelling argument otherwise (and nobody counterbid anyway), that’s what the courts held in to be in the best interest.

At this point, holding up the courts is essentially taking the company hostage and shaking us down for more money since the resolution is going to be the same.

Then I can only assume that they have lawyers who are charging them by the hour to fight points that they can’t win.

People can argue whatever they like, but that doesn’t mean that they’ll prevail. Under NLRB v. Bildisco, executory contracts can be terminated in bankruptcy. Under current law, the dealers are toast.

Incorrect. The dealers aren’t even creditors here, so they have no claim vis-a-vis priority in the bankruptcy.

The Supreme Court has already ruled that contracts can be terminated in bankruptcy. The dealers have no case. They may carry some political weight — we’ll see how that plays out — but legally, they’re SOL. As they should be.

Then what would have happened to Chry Co’s Ch 11, isn’t it very possible that it would have converted to a 7. And isn’t it also plausible to say that had the courts followed the law to the letter, and not crammed down so quick under the Obama opinion, that all hell would have broken loose.

I think what the author is saying is that GM dealer body is a more sophisticated group, and if they have their way the aformentioned scenerio could likely occur. How is that out of date and false?

This editorial might’ve only been wrong months back, but by now it’s embarrassing out of date also.

Unless they outbid the gov (which they didn’t even try), it’s a forgone conclusion. The reason why they didn’t is because they can get someone else to pick up the tab. Responsibility for external costs is the last thing people in it for the money want.

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Whatever happens the taxpayer will pick up the tab.

That’s absolutely correct, but not for the reasons wingers think it is. The hand grabbing from your pocket are a few clever business thieves manipulating a system intended for the benefit of the rest of us (ie gov), and wingers are ironically one of their tools of choice.

Not in Bankruptcy Court.

Maybe Congress can do something.

Because they were making the money, GM wasn’t. They had the profits and GM had the losses. Why would they want to acquire the capital-intensive loss-making enterprise that enabled their profits? They don’t want to own GM for the same reason Coca-cola spun off its bottlers.

I was wondering something similar. The only reason I can think is that, collectively, the dealer body is not as smart as they’re made out to be and truly did not see the writing on the wall with regards to GM and it’s likely future. They rode the money train, but it had to be painfully obvious that there was a last stop coming down the line, or that there’s no real chance of a second ride. Yes, it was lucrative while it lasted. No, you’re not getting that market back.

I also highly doubt the dealer body wants control of GM for the same reason. These are not big-picture/long-term people, the kind of people you want running a manufacturing enterprise. I’d sooner have the UAW and the government in control as they’d at least be interested in keeping the enterprise viable in the long term. Dealers would run it into the ground in the most painful way possible as long as it maximized their profits.

Allow me to cry crocodile tears for the dealers who didn’t see the massive, sucking black hole on the horizon. Another poster put it thusly (paraphrasing) “You, as a franchisee, need to keep up with and proactively address the viability of the brand you are franchising. If you own a donut shop and your supplier starts ordering cheaper foodstuffs from the Food, Beverage and Antifreeze Corporation of China, maybe you ought to speak up and do something”

Another question: Why is GM doing a dealer cull at all? Could they not have offered a Chevy and/or Cadillac franchise to each BPG, Saturn, Saab and/or Hummer store they were going to terminate and then let the whole mess sort itself out through attrition? Are the laws such that a franchise conversion would really have been more expensive than an outright knifing?

Expect more creativity in bankruptcy court, that’s my assumption.