According to Bruce Clark from Moody's, the Obama administration "certainly needs sound advice on the complicated area of bankruptcy and implications for the economy." Cause heaven forbid they are bailed out first only to realize subsequently that the industry is completely unviable at sub 10 million SAARs. Too bad this is exactly what happened - according to Bloomberg:
When the government loaned the $17.4 billion in December, it didn’t work out an inter-creditor agreement that would determine its rights relative to past lenders. Cadwalader is working on such an agreement, as well as on related labor and environmental matters, the people said.
Cadwalader is also advising the government on how it might become a so-called “debtor-in-possession” or DIP lender, the people said. DIP loans fund a company’s operations as it reorganizes in bankruptcy. DIP lenders get repaid before pre-bankruptcy lenders and creditors.
The D-2 owe the U.S. government a viability progress report by February 14, and on March 31 the government has the option of putting them in bankruptcy. It will be a shame if the $20 billion of taxpayer money the government has spent so far in another crescendo of rash decisions is all for nothing.Sphere: Related Content Print this post