Analyst Warns GM Collapse May Dwarf Even Lehman Brothers

GM, trying to lower debt and wages out of court, said Dec. 2 it must slash $62 billion in liabilities by almost half, excluding government loans. Otherwise it may wind up like Lehman, which will pay an estimated $906 million in judge-approved charges for professional services, said Lynn LoPucki, who teaches bankruptcy law at the University of California, Los Angeles.

“The bonanza has already begun and will continue through the bankruptcy,” said LoPucki, who keeps a database of bankruptcy statistics he used to estimate the fees. “GM is in serious financial difficulty and can’t make the cuts they need outside of bankruptcy becausethey can’t force creditors to go along with them.”


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commander104 - 2/25/2009 5:49:52 PM

+1 Boost

I guess all the economists are on the used car websites.

woood - 2/26/2009 1:14:49 AM

0 Boost

No it won't. GM needs to restructure and the only way for them to do it is through government sponsored bankruptcy. Start again as a smaller company. In line with demand for its products.

LauderdaleDriver - 2/26/2009 9:08:48 AM

+1 Boost

I think even those who hate GM need to contemplate the devastation a bankruptcy might mean. Bet you some kind of restructuring, with a different name, is the ultimate solution.

The consequences of a regular bankruptcy, if truly worse than Lehman Bros, would mean food riots.

E36er - 2/26/2009 12:07:58 PM

+1 Boost

Nice graphic Agent 009, says it all.