Bankruptcy essay

The economic costs of this decision will soon become apparent. Ms. Ball asserts that New Chrysler now “has the ability to go to the markets and borrow on a senior secured basis ahead of the government loans.” The next round of senior secured lenders are unlikely to get burned again by the government. The government has scared them off! Lenders willing to lend to New Chrysler will demand a higher premium and more restrictions because of the interference played by the government. Chrysler will have to meet this higher cost of capital as they go forward and compete against auto manufacturers without a similar overhang.

Bankruptcy essay

bankruptcy essay

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