Cox urges GM, Chrysler to file bankruptcy in Michigan
Mike Cox (R)
LANSING, Mich. (Legal Newsline)- If necessary, General Motors Corp. and Chrysler LLC should file for bankruptcy protection in Michigan, state Attorney General Mike Cox said Wednesday.
Cox wrote in letters to the companies' chief executives that they should consider filing for bankruptcy protections in a Michigan federal court rather than one in either New York or Delaware, where GM is incorporated, because it would be more convenient for their creditors.
"I am gravely concerned about the impact of any bankruptcy filing in a jurisdiction outside Michigan," Cox wrote to GM CEO Fritz Henderson and Chrysler CEO Bob Nardelli.
The Republican attorney general noted that the state is a creditor of each of the beleaguered automakers because of their company's workers' compensation claims, tax obligations, among other liabilities.
"The costs for many (Michigan-based) creditors to participate in a New York or Delaware bankruptcy is overwhelming and would undoubtedly lead to unjust bills," Cox said. "I am confident that you, as a lifelong Michigander and the leader of one of Michigan's most beloved institutions, would want to avoid that potential outcome."
In his letters Cox asks that the CEOs to notify him if they eventually decide to seek bankruptcy protections for their company.
"If you ultimately decide to choose bankruptcy as the vehicle to a stronger (company), I respectfully ask that you and your representatives meet with me before any filing is made," the letter said. "Please feel free to contact me at any time, day or night, to discuss this matter."
Currently, the cash-strapped automakers have been kept solvent with more than $17 billion in federal loans. Ford Motor Co., another Michigan-based automaker, has not received federal bailout funds.
From Legal Newsline: Reach staff reporter Chris Rizo at email@example.com.