As a bankruptcy lawyer, I can say that Chapter 11 is not a bad thing per se; it is not a bad place to be for a company in need of reorganization (just ask Continental Airlines, for example).  Obviously bankruptcy is not any CEO’s first choice and it is harder to be successful in a reorganization due to the restraints of the 2005 amendments to the Code which were pushed through by the credit card lobby; however, that being true, it is still the best hope for a restructuring of a company which is as tangled a mess as is GM.  So, all the money which has been paid to keep that company alive has only accomplished one thing: to post pone the inevitable filing of bankruptcy.  This is just my opinion, not based on anything other than the news papers which I read.  I would also say that the GM bail out is not the only situation where the taxpayer money spent does not have result in a successful turn around! 

 “Last week GM posted a $30.9bn (£21.9bn) loss for 2008 and warned that 2009 was set to be ‘challenging’.

The firm, which plans to cut 47,000 jobs also said it might need another $22.6bn in government loans to survive.

It has already received $13.4bn in federal loans as it struggles in what analysts say is the worst vehicle sales market in 27 years.

Step in

‘The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern,’ auditors for Deloitte & Touche wrote in the annual report.

The auditors’ remarks reflect comments already made by the firm about its dire difficulties.

Earlier this week, GM’s top executive warned the European divisions of General Motors (GM) could collapse within weeks without European governments’ help - costing up to 300,000 jobs.”

 Here is the link to this article: http://news.bbc.co.uk/1/hi/business/7926258.stm

Michael