If GM’s "reinvention" doesn’t work…
Bankruptcy is really more of a beginning than an ending, since the company gets to start over in a way. But if the new company can’t make a go of it, then there is a definite ending — liquidation. Included in GM’s bankruptcy filing is an analysis of what GM’s ice cube melting would look like.
In a fire sale, the largest United States automaker would likely yield less than $10 billion in net proceeds.
The costs of liquidating would be huge, according to the analysis — between $2 billion and $2.7 billion, the document says. Taking that into account, the amount left for creditors would be between $6.5 billion and $9.7 billion…
And what would G.M.’s creditors get?
Bank lenders owed $5.4 billion would recover between 26.3 and 77.1 cents on the dollar. The United States Treasury, on the hook for $20.5 billion, fares even worse under this scenario, getting just 12.7 cents to 23.7 cents on the dollar for its claims. Unsecured creditors would get nothing.
I think that paragraph speaks for itself.
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