'GM Officially Bankrupt. Entered Chapter 11'

GM Officially Bankrupt. Entered Chapter 11

By Auto Bots at 06/02/09 06:12

As we all expected, Pres. Barack Obama headed the announcement of General Motor's official entry to bankruptcy. He announced Monday that the formerly largest American automaker will file for the Chapter 11 bankruptcy proceedings.

But just like Chrysler, the Chapter 11 bankruptcy isn't really the kind of bankruptcy you are thinking. It's more like a restructuring procedure which will be administered by the government. The federal government will also earn stakes at the company, thanks to the loans handed to the auto companies during their tough times.

Pres. Obama said GM's Chapter 11 filing will not come easily for the company but they have to endure things as it is for “a viable, achievable plan that will give this iconic American company a chance to rise again.” The proceedings is expected to be completed in about 60 to 90 days because of the company's size and complexity of operations.

With the current events in GM along with Chapter 11, they will have to eliminate 21,000 jobs by 2010, shut down hundreds of more dealerships and close more than a dozen production plants.Shareholder for GM will also need to make great sacrifices. The government will earn 60% of the company because of $30 billion loan given to GM.

In light with their Chapter 11 filing, GM named auto expert Al Koch as its Chief Restructuring Officer. Al Koch will be responsible in selling Hummer and Saturn as part of the restructuring  as well as the liquidation of company assets.

Though they are in Chapter 11, consumers can be hopeful that their warranty and lemon law claims may still be honored. Chrysler's filing set an example for GM. Many consumer attorneys advocated lemon law rights of consumers and were able to secure those rights for Chrysler consumers. We are hopeful in the lemon law community that this will be the case with GM as well.

www.normantaylor.com

This is really very tough time to avtomobili . But we have to hopefull with these conditions. We hope that everything will go in right way.

Name:     (required)
Email:    (required, not published)
Comment: