Hot Air » Blog Archive » GM prepares bankruptcy filing, with $70B taxpayer pricetag
Hot Air » Blog Archive » GM prepares bankruptcy filing, with $70B taxpayer pricetag.
One plan under consideration would create a new company that would buy the “good” assets of G.M. almost immediately after the carmaker files for bankruptcy.
Less desirable assets, including unwanted brands, factories and health care obligations, would be left in the old company, which could be liquidated over several years.
Treasury officials are examining one potential outcome in which the “good G.M.” enters and exits bankruptcy protection in as little as two weeks, using $5 billion to $7 billion in federal financing, a person who had been briefed on the prospect said last week.
The rest of G.M. may require as much as $70 billion in government financing, and possibly more to resolve the health care obligations and the liquidation of the factories, according to legal experts and federal officials.
As Ed points out:
Basically, this is a shell game. GM’s investors get to buy up all the good assets, while dumping the rest into the corpse of GM. Once that happens, the taxpayers will be on the hook for those toxic liabilities, adding another $70 billion or more to our existing entitlement liabilities, only on the terms of the pensions negotiated privately. Even getting off the hook will gain GM’s investors an extra $7 billion in taxpayer cash.
Sweet deal … for them. For each American family, that will cost $1000, or a good down payment on a car.
