1. One alternative to the sale of Chrysler was to cease operations and then liquidate the firm's remaining assets.  Chrysler did have a potentially valuable headquarters building (although there is little demand for office space in Detroit).  Discuss whether Chrysler should have been liquidated, or whether the government's plan was preferable. 
2. In its lawsuit, attorneys for the State of Indiana argued that the harm from showing preference to unsecured creditors such as the UAW, over-secured creditors such as the State of Indiana, might do far more long-run damage to the U.S. economy than any short-term harm from the loss of jobs from liquidating Chrysler.  Do you agree or disagree with that statement?  Explain.
3. Were there alternatives to the government's preferred bankruptcy structure that would have satisfied the State of Indiana?  Explain.
4. Chrysler exited bankruptcy with all its debt canceled and GM may soon follow suit.  Will that give GM and Chrysler an unfair advantage over Ford?  Explain.

Answer rating: 100% (QA)

1 In a Chapter 11 bankruptcy some debts are discharged canceled and the firm then exits bankruptcy usually with a different group of equity holders In many cases a majority of the new equity is held b... View the full answer