"Obama Transition Said to Consider 'Prepack' Auto Bankruptcy" from Bloomberg reports that the Barack Obama transition team is looking into - despite their labort support - a prepackaged bankruptcy to restructure the failing auto industry.
Obama’s team has already contacted at least one bankruptcy- law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack, according to this person. U.S. lawmakers yesterday postponed until December a vote on whether to give General Motors Corp., Ford Motor Co. and Chrysler LLC a $25 billion bailout as an alternative. Automakers such as GM could use court protection to reduce debt and reject unfavorable contracts.
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