Although Chrysler and General Motors emerged from Chapter 11 in mid-2009, many issues remained. Several pension funds filed suit alleging that the planned sale of Chrysler’s assets was illegal under bankruptcy law; personal injury lawyers protested the limited liability status of the “new” automakers; members of Congress questioned why numerous dealerships were closed during proceedings; and creditors, dealers and bondholders battled in court to get paid or make claims on existing assets. Were these two high-profile cases anomalies, or will we see similar cases down the road?
In this article from The National Law Journal, Amanda Bronstad interviews Squire Sanders partner Stephen D. Lerner, chair of the firm’s Bankruptcy & Restructuring Practice Group, about how failed pre-bankruptcy negotiations with creditors led to so-called “363 sales” of assets free of liability and how the federal government’s intervention in both cases could affect future bankruptcies in the United States.
Mr. Lerner represented the Committee of Chrysler Affected Dealers and several prominent General Motors suppliers in the cases.
This article is reprinted with permission from the November 30, 2009 edition of The National Law Journal.