(Chicago, IL) -- President-elect Barack Obama's transition team is not exploring a prepackaged bankruptcy plan for American carmakers.
That's according to Obama officials responding to published reports that the option was on the table. "Bloomberg News" reported that Obama's team was considering a swift prepackaged bankruptcy for automakers as an answer to the industry's financial woes.
According to the report, Obama's team has already contacted at least one bankruptcy law firm to say that Daniel Tarullo, the head of Obama's economic policy working group, would be calling to discuss the workings of a so-called "prepack."
Last Sunday, Obama told CBS News's "60 Minutes" that bankruptcy was just one option being examined and that government aid to automakers might come in the form of a "bridge loan" if the industry could draw up plan to make itself "sustainable."
The president-elect earlier urged Congress to approve up to $50-billion to save automakers, using the model of Chrysler's bailout in 1979.
U.S. lawmakers yesterday asked General Motors, Ford and Chrysler to provide a business survival plan in exchange for up to $25-billion in loans.
(Copyright 2008 by Newsroom Solutions)