A Reassessment of Bankruptcy Reorganization after Chrysler and General Motors
Barry E. Adler
New York University School of Law
December 31, 2009
NYU Law and Economics Research Paper No. 10-04
The descent of Chrysler and General Motors into bankruptcy threatens the Chapter 11 reorganization process itself. In each case, a judge approved a transfer of a debtor’s assets to favored creditors under circumstances where holders of other claims were denied basic safeguards. Legal reform is required, and proposed here, to assure that aggrieved creditors are granted protection either of the marketplace or of the Bankruptcy Code’s creditor democracy provisions. Such reform could help minimize the cost of capital faced by future debtors.
Number of Pages in PDF File: 22
Keywords: Bankruptcy, Reorganization, Corporate Finance
JEL Classification: G33, K22
Date posted: January 1, 2010 ; Last revised: January 25, 2010
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