Hit the Breaks: Why Bankruptcy Beats Auto Bailout

February 27, 2009

Doug M. Foley, chairman of McGuireWoods’ Restructuring and Insolvency Department, was one of the three speakers at the Heritage Foundation event, called “Hit The Brakes: Why Bankruptcy Beats Auto Bailout,” on February 27.

Foley joined Paul Ingrassia, the former Detroit Bureau Chief of the Wall Street Journal and co-author of Comeback: The Fall and Rise of the American Auto Industry, and Andrew M. Grossman, senior legal policy analyst at the Center for Legal and Judicial Studies at the Heritage Foundation. The host was James L. Gattuso, senior research fellow in regulatory policy for the Thomas A. Roe Institute for Economic Studies at the Heritage Foundation.

The speakers discussed why General Motors and Chrysler are on the brink of insolvency, with their prospects for a quick recovery fading, despite receiving a more than $20 billion bailout less than three months ago. The discussion provided insight into why bankruptcy presents the opportunity for the beleaguered automakers to get a fresh start. The Heritage Foundation event focused on the benefits and challenges of going through bankruptcy, and how to avoid interventions that actually retard progress.