Document Type
Article
Publication Date
2010
Abstract
Chrysler entered and exited bankruptcy in 42 days, making it one of the fastest major industrial bankruptcies in memory. It entered as a company widely thought to be ripe for liquidation if left on its own, obtained massive funding from the United States Treasury, and exited via a pseudo sale of its main assets to a new government-funded entity. The unevenness of the compensation to prior creditors raised considerable concerns in capital markets, which we evaluate here. We conclude that the Chrysler bankruptcy cannot be understood as complying with good bankruptcy practice, that it resurrected discredited practices long thought interred in the 19th and early 20th century equity receiverships, and that its potential, if followed, for disrupting financial markets surrounding troubled companies in difficult economic times is more than small.
Keywords
corporate reorganization, bankruptcy, chapter 11
Publication Title
Michigan Law Review
Repository Citation
Roe, Mark J. and Skeel, David A. Jr., "Assessing the Chrysler Bankruptcy" (2010). All Faculty Scholarship. 685.
https://scholarship.law.upenn.edu/faculty_scholarship/685
Included in
Banking and Finance Law Commons, Bankruptcy Law Commons, Corporate Finance Commons, Finance Commons, Law and Economics Commons
Publication Citation
108 Mich. L. Rev. 727 (2010)