Visit Your Local PBS Station PBS Home PBS Home Programs A-Z TV Schedules Watch Video Support PBS Shop PBS Search PBS
Features & Commentary
XChange

Where Should an Auto Bankruptcy Be Filed?

posted by Darren Gersh, Washington Bureau Chief at 5:34 PM on 04/24/09

Power TownAs the lawyers say, let me stipulate that I am not a lawyer.

That said, I have talked to some bankruptcy lawyers lately about where Chrysler or GM might file for bankruptcy if it comes to that.

You'd probably think this is an easy decision. Automakers = Mo Town. Detroit is the Motor City. Autoworkers live in Michigan and Detroit. If an automakers goes bankrupt, they'd go bankrupt in Detroit.

That way, the people most affected by the case -- suppliers, workers, auto executives -- would have an easy commute to court. In fact, it's a few blocks from GM headquarters!

But this is the law we are talking about, so it is not that simple.

Chrysler is now a private company -- Chrysler Holdings LLC. I tired to find out where it is incorporated, but couldn't pin it down. Delaware is a good bet since so many companies incorporate there, and you might think a bankruptcy would be filed there.

But the best bet is on the Southern District of New York -- Manhattan. And that may not be good news for Detroit workers.

According to UCLA Law Professor Lynn LoPucki, going to New York is an "anti-labor move." LoPucki says the New York court tends to favor people who can bring them big cases -- lawyer and debtors.

And last I checked, there were not many autoworkers in Manhattan. If, as appears increasingly likely, Chrysler and GM's future is hashed out in a New York courtroom, most of the the people most affected by the decision won't have a chance to be there while it happens.

0 Comments.
Post A Comment

Post A Comment




Remember me?

(You may use HTML tags for style)

Back To Top
Get RSS Feed
Recent Posts
Categories
Authors
Archives

Comment Policy

This discussion forum is a place for constructive dialogue. Make sure your comments are appropriate before submitting them.

Inappropriate comments include content that:

  • Attempts to influence the price of a stock or other investment
  • Is defamatory or libelous
  • Is abusive, harassing, or threatening
  • Is obscene, vulgar, or profane
  • Is racially, ethnically or religiously offensive
  • Is illegal or encourages criminal acts
  • Is known to be inaccurate or contains a false attribution
  • Infringes copyrights, trademarks, publicity or any other rights of others
  • Impersonates anyone (actual or fictitious)
  • Is off-topic or spam
  • Solicits funds, goods or services, or advertises

Nightly Business Report does not edit posts but reserves the right to delete comments that violate our policy.