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Originally Posted by UCF w00t
Yup. The amount of federal money it would take to get GM through Ch. 11 would be MUCH greater than the amount it would take without it. Either way, Obama seemed committed to keeping GM afloat in his speech (even though the US didn't invent the automobile as he said) so I'm really not too worried about GM going Ch 7.
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Not sure how you figure that.
Chapter 11 does not mean that the government pays off a business' debt. It means the government decides who gets how much and what after negotiations have taken place between all parties affected.
Right now, GM spends more money then it makes. It cannot even afford current finance payments. It cannot continue down this road - something has got to give because sooner rather than later, it's going to have no money in the bank. When that happens and a supplier/bond holder does not get paid, they can force GM into bankruptcy by petitioning the courts. In other words, Chapter 11 may be something GM may not be able to avoid.