Sorvino Weighs in on Automotive Industry Bankruptcy Crisis
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."
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