Bloomberg is reporting that the Federal Government may face Chrysler and GM into bankruptcy to ensure that these companies return the 17 billion in bailout funds they were lent last year. The issue revolves around the subordination of the companies debt. Right now, several big banks like Citigroup and Chase are first in line. However the Feds may have the option of forcing the companies into bankruptcy to ensure the taxpayers money is returned.
Click here for the story.
For my part, if the federal government is even considering a structured bankruptcy of these companies, why did they bother with a bailout in the first place? It seem to make a little sense to give detroit money to avoid bankruptcy, then demand they go bankrupt to be sure the funds are returned.
Best,
James
DINKS (Dual Income No Kids) Finance is a blog discussing personal finance for couples. While by no means financial experts, we own a variety of assets including real estate and stocks. We've been up to our eyeballs in debt and have made tons of financial mistakes. However, we've successfully retired that debt and we both do learn from our failings. We hope that our voice in this blog can help others in achieving their goals!
