May 6, 2009 / Law Alert

Protecting yourself from automotive industry reorganization efforts

The Chapter 11 bankruptcy filing by Chrysler, LLC and its affiliates, as well as General Motors' struggle to reach an out-of-court reorganization with its creditors, is likely to create a ripple effect that could cause all tiers of the automotive supply chain as well as businesses connected to the supply chain to stretch payables or seek their own bankruptcy protection. Taking steps now may help protect you against the effects of insolvent customers or suppliers and prepare your company for a possible waive of bankruptcy avoidance and preference actions.