Some turnaround specialists are concerned the government-guided bankruptcy reorganizations of Chrysler and GM could make it harder for companies to obtain capital in the future. In these cases, the companies’ labor union, the United Auto Workers, received more favorable treatment than the companies’ secured creditors.
This violates well-established bankruptcy law principles, said Peter Kaufman, president of Gordian Group LLC’s restructuring practice in New York. The United States is the most welcoming place in the world for capital, particularly for loans, he said, because “everyone knows what their down side is.”
“Now that has all been stood on its ear,” he said.