Quote:
Originally Posted by DGthe3
So no healthcare costs or unemployment would have to be paid by the government if GM decides to cut benefits and jobs?
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There is no liability on the part of the government to pay them out. There is no statute within the Chapter 11 bankruptcy law which states that the government automatically assumes ownership of a companies liabilities regardless of what they may be.
That is not to say that socialism will kick in and the judge will order the government to handle the healthcare and pension obligations but that would set a very dangerous precedence.
The judge would put these obligations first in distributing the companies assets before he would give those assets to a bank at the cost of making the taxpayer responsible for GM's healthcare/pension obligations. Believe me when I say that the UAW is in the drivers seat if GM goes Chapter 11.
Many companies have gone under in the past and as a result, employees health and pensions plans had disappeared in a cloud of smoke. What saves the UAW here is that GM has billions of real assets which they can make claim to in chapter 11 bankruptcy proceedings.