Main Menu
Print PDF

Sorvino Weighs in on Automotive Industry Bankruptcy Crisis

CNN Money
March 30, 2009

The Obama administration offered General Motors and Chrysler LLC a huge carrot - the possibility of billions of dollars more in loans if they can win additional concessions from creditors and unions. The administration insisted that it may force a bankruptcy to bring about the restructuring it thinks is necessary, including the shedding of debt and further closings of plants and dealerships. Administration officials insisted that if there is a bankruptcy it would be a "quick rinse" of the company's obligations and that they could be in and out of bankruptcy in as few as 30 days.

Some bankruptcy experts scoffed at that idea though, given the size, complexity and contentiousness of the problems in the industry. Heidi Sorvino said the only way a quick trip through bankruptcy would work is if the automakers, creditors and union all agreed on the restructuring changes before the bankruptcy filing. She doesn't see that happening unless the government comes up with tens of billions of dollars to make all the different parties happy.

"Money solves all problems. If the government is willing to pay to satisfy all the creditors, you could do it," she said. "If not, no way can it happen in 30 days or even six months."

If you would like to receive additional news alerts, event notifications, or correspondences pertaining to this and other industry-specific topics, please sign up by visiting the Contact Us page. Be sure to provide your contact information, including email address, and list the areas of practice or industries for which you would like to receive information.

This correspondence should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation with any specific legal question you may have.

Back to Page