While the majority of GM bondholders are certainly in favor of GM’s plan to quickly sell off all of its assets in bankruptcy court, a ragtag group of bondholders called the “Unofficial Committee of Family & Dissident GM Bondholders” has expressed its disdain for the plan. Yesterday, the group filed a formal objection to the court.
 
GM’s proposal involves section 363 of the U.S. bankruptcy code, which stipulates the procedure for an accelerated “363 sale” of the company’s assets. That means that GM intends to completely avoid the standard Chapter 11 bankruptcy protection plan.
 
Instead of GM’s speedy sale plan, the group …read more

Although the island state may seem to be a peaceful haven from the troubles in the continental U.S., the situation of Hawaii Superferry, Inc., serves as a reminder that even Hawaii has problems too. The ferry company, which has seen plenty of trouble in its short existence, has now been forced to file Chapter 11 bankruptcy protection.
 
Hawaii Superferry blames the recent development on a Hawaii Supreme Court cease-and-desist ruling, barring the company from undergoing any interisland ferry operations. The company also expressed concern over the decline in tourism and increasing fuel prices, citing them as obstacles to profitable business.
 
The ferry …read more

Chrysler has declared bankruptcy and GM may not be far behind.  But what does bankruptcy mean to a business?  How does it affect the owners, the shareholders, the bond-holders, the employees?
Reorganization, not Liquidation. Chrysler’s bankruptcy is a reorganization (Chapter 11) bankruptcy, not a
liquidation (Chapter 7). The purpose of Chapter 11 bankruptcy is to give the company a fresh start, an opportunity to come out of the process and continue to be a viable company.  At the beginning of the reorganization, the company presents a plan to pay its creditors and emerge stronger as a restructured company; the creditors evaluate the …read more