New York Times columnist Joe Nocera, who knows a thing or two about business, decided to interview some bankruptcy experts, in order to learn whether letting General Motor file for Chapter 11 was a good idea. Apparently the answer is "not really":
...bankruptcy is anything but a snap. It is a long, difficult, drawn-out process with no guarantee that a bankruptcy judge will go along with everything G.M. wants to do. Several bankruptcy lawyers I spoke to all made the same point: if there is any way these goals can be accomplished outside of the bankruptcy process, then that should be tried first. As one lawyer put it to me, "Bankruptcy sucks as a way to achieve real business resolution."
He offers more reasons in his excellent article today, which you can read here.
Nocera understands GM, and perhaps the rest of the Big Three, still have to do some serious restructuring. But he also thinks that it may be possible for GM to restructure outside of bankruptcy, under government oversight, just as Chrysler once did--and that the end result would be better for all involved.
Read more about why the government should consider bailing out the Big Three here.