General Motors Bankruptcy

There has been a great deal of publicity about the GM Chapter 11 during the past six years. There is no doubt but that the Chapter 11 and help from Washington has kept GM alive and millions of jobs in the United States. While this may seem unfair, it is the “fresh start” that everyone who files bankruptcy, no matter how big or small, wants to achieve. This is the bankruptcy part of the bankruptcy.
GM has recently faced another problem—faulty ignition switches in some GM vehicles that have caused deaths and serious injuries. The thinking in the bankruptcy community until recently was that the GM bankruptcy, much like any individual bankruptcy, would terminate any debt that preceded the filing of the case. Last week, word came down that GM may have committed fraud may and may have known about these problems and failed to make the appropriate disclosure to the bankruptcy court. This is a lesson well learned. Bankruptcy provides a fresh start and many other positive aspects for individuals and businesses in financial trouble. However, all of the good things quickly go away if the person or entity seeking bankruptcy protection is not completely truthful and accurate.