Barry Adler writes in BusinessWeek op-ed that Chapter 11 is not the answer for troubled U.S. automakers
In an op-ed in BusinessWeek, Barry Adler, the Charles Seligson Professor of Law, writes that conditioning government relief on Chapter 11 bankruptcy alone is not the right answer for troubled American automakers.
“Saving Detroit requires even bolder action,” he writes. “Congress should immediately place the auto manufacturers’ assets under government management and decide afterward how much to pay for them.”
Such a plan, known as a legislative taking, would allow Congress to take automakers’ imperiled assets and place them in the hands of a receiver who could make deals with workers, dealers, and suppliers. The receiver could then, on the government’s behalf, sell the new entity in the marketplace, as is, or with a continuing subsidy.
“A legislative taking wouldn’t be a panacea,” Adler writes, but “quick action might preserve a viable portion of the U.S. auto industry.”