Quote:
Originally Posted by ronss
Traditional bankruptcy would not have liquidated gm but simply reorganize most likely without the unions, I'll let u all put 2 and 2 together on that one...
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You can only reorganize and continue operations if you have operating capitol. For a large industrial company it takes xxx millions every month in operating capitol just to turn the lights on and function. When the cash on hand approaches zero, and there is no private lending, a reorganization bankruptcy simply won't work. Congrats, you're reorganized.... oops how do you pay the suppliers, employees, utilities....
A bankruptcy judge's first question would have been where is your capitol to continue business. Don't have any. Reorganization bankruptcy denied, go get in the liquidation line.
"Simply reorganize" sounds nice, it's a kabillion times more complicated... but comes down to the basic fact of reorganizing does you zero good with no working capitol. Which is exactly why they reorganized with govt capitol.