The loans do not include the concept of a so-called "car czar" to oversee the automakers, although it does say that a designee of the President would determine if the automakers are making the changes necessary for them to be considered viable.
quote:
"We do not feel it is appropriate for government to dictate the specific terms of negotiations between management and labor or management and dealers or management and creditors," the official said.
I still see them going into chapter 11 before the loans are due.
Does chapter 11 legally protect them from having to pay back the loans while they are restructuring?
Dec-19-2008 19:16
SkyHigh
hillbilly.......
Registered: Oct 2003
Location: canada toronto
quote:
Originally posted by Skipper
I still see them going into chapter 11 before the loans are due.
Does chapter 11 legally protect them from having to pay back the loans while they are restructuring?
Is chapter 11 a bankruptcy protection? If yes then yes.
___________________
I am become Hoover, sucker of worlds.
R.I.P English..
Dec-19-2008 19:27
Skipper
Supreme tranceaddict
Registered: May 2002
Location:
quote:
Originally posted by SkyHigh
Is chapter 11 a bankruptcy protection? If yes then yes.
Yes, but it's different than chapter 7. Under chapter 7, assets are liquidated to pay creditors. Under chapter 11, the company is trying to restructure and while in chapter 11 it asks lenders for new terms, rates, etc. I am wondering if the govt loan could or would be just another loan to be restructured if they did file for chapter 11. If so, the repayment clause is pretty useless.
Dec-19-2008 20:17
MarkT
Automatic Static
Registered: Sep 2003
Location: Toronto
it sounds like Bush wants them to end up in some sort of 'orderly bankruptcy' or whatever he termed it (to force/allow for restructuring).
so I wouldn't be surprised if repayment could be halted under Chapter 11...?
the point of the clause seems to be to force them into Chapter 11 anyway, assuming they don't turn things around (ha, yeah right) by March. either they repay, which they can't, and truly go bankrupt (Chapter 7, I guess) or you don't HAVE to repay, but you put forth the required strategy and perhaps go through Chapter 11?
from what little I truly understand, lol...this sounds like a great plan. it's putting the proverbial gun to the head. change or cease operations. the automakers (and the unions) will have no choice.
