Monday, November 17, 2008

Chapter 11 for GM

The best argument I have heard for keeping GM out of chapter 11 is that they won't be able to obtain DIP (Debtor-in-possession) financing and thus will actually end up in Chapter 7.  However, if this is the reason why they need a bailout as opposed to bankruptcy couldn't the government provide the DIP financing?  Then you can sustain GM through the reorganization, and more importantly, a reorginazation in fact occurs.

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