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Posted by John K. Seidts on Friday, November 28, 2008 at 16:26:05 :
In Reply to: Bankruptcy isn't the end of the world posted by D. Sherman on Friday, November 28, 2008 at 11:15:16 :
Chapter 11 and 13 allow you to retain assets and continue operations while re-negotiating with your creditors. Not all of these corporations are able to operate as you describe. In 65% of cases in the US, corporations go immediately to Chapter 7, which is a complete liquidation of assets to pay creditors and essentially the end of your business. This is why GM et al are going to the US Govt- they would be in Chapter 7 right now without protection because they have declining future value and capability of raising capital to continue operations. GM is spending $143 Million a day -MILLION- to keep afloat and there isn't enough money coming in the door to keep them going. They just announced today that they are looking to sell their real estate and holdings in Europe and lease them back. They want the option to bail out of property quickly if they have to. It is the equivalent of you selling your house and moving into an apartment. I don't want to see big charity handouts, but we are in serious danger of losing big jobs if we don't find some way to help them.