Romney’s Auto Rescue Claims Don’t Hold Up: “I just think he’s somewhere out in the ionosphere.”

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5. Chapter 11 bankruptcies offer protection against creditors

and the corporation must bring its assets before the bankruptcy court and the judge supervises a rescheduling of debt payment. And if that rescheduling and restructuring falls through and the corporation can't stick to its modified repayment plan, the judge can order the corporation into a chapter 7 dissolution (i.e. corporate death). When Romney talks about a managed bankruptcy he means a chapter 11. But in a chapter 11 there's always the inherent risk that the corporation will not succeed in getting through the bankruptcy process and will have to file for chapter 7 involving a liquidation of assets and dissolution. In GM's case, it was clear going in that the chapter 11 would fail unless the corporation had access to borrowed capital. And no lender was lending. Since Romney opposed the government loan, he was de facto advocating a chapter 7 which would have meant the death of GM.