A bankrupt GM Corp (GM) could be reorganized in as little as a month. But, if the case lingered then a “tremendous sinkhole” could open in the U.S. economy, said Kevin Gross, a judge for Delaware’s bankruptcy court. “It has to be out in 30 to 60 days,” he said. “It would open a tremendous sinkhole (in the economy) not to make it happen.”
From Reuters: GM would have to reach agreement with most parties prior to filing and then move its healthy operations quickly to a new entity that is free of pre-bankruptcy liabilities, said Mark D. Collins, director of Richards, Layton & Finger in Wilmington, Delaware…”The key is speed,” he added, speaking at a panel discussion hosted by the ABF Journal and the New York Institute of Credit.
The judge who handles the case, should GM file, would be under pressure to accelerate the proceedings, said Gross.
Gross and fellow Delaware bankruptcy court judge, Kevin J. Carey, said they had no special knowledge of whether GM might file or how the case may proceed, although they both said they expected it to enter bankruptcy.
GM has until June 1 by the Obama administration to present a plan to restructure its roughly $28 billion in unsecured debt. GM’s leading bankruptcy plan right now consist in that of breaking the company into two parts: a good GM made up of strong assets ; and a bad GM of underperforming assets. No matter how things evolve from here, there is no question GM remains a melting icecube.