A House Subcommittee on Commercial and Administrative Law held a third hearing on ramifications of the auto industry bankruptcies July 22. The hearing featured testimony from inside and outside counsel at GM and Chrysler as well as Douglas Baird, a University of Chicago law professor quoted in InsideCounsel‘s September story, “Fire Sale.” Rep. Jon Conyers, D-Mich., chairman of the House Judiciary Committee, introduced the hearing with a statement noting that “many important questions remain about the companies’ use of certain Bankruptcy Code provisions in their cases, the future of the auto industry, and the many millions of Americans affected by these bankruptcy cases.”
Some of the testifying witnesses’ statements shed light on the usefulness of 363 sales–sales provided for in Section 363 of the Bankruptcy Code–in the Chrysler and GM bankruptcy proceedings. Lawyers for both companies made clear at the hearing their belief that the sales combined with the government aid made their enterprises’ survival possible. They also touched on the prospect of legislation that would address some of the more questionable aspects of the sales.
