Planned insolvency

Has nobody else noticed the travesty of justice that is playing out in the financial press over the "bankruptcy" of Chrysler and GM? If you or I did even 1/4 of what they are doing we'd be spending time next door to Conrad Black.

You can't decide you are going to declare bankruptcy and then divvy up the good assets before you call in the trustee. That's the whole point of a trustee - to ensure that all the creditors get a fair crack at all the assets. Yet the pre-bankruptcy fire sale is exactly what is happening. These guys have been talking about going broke for months now and meanwhile using the time to sell off anything that they can. Eventually North American taxpayers are going to end up on the hook for whatever happens to be left over.

I'm happy for Frank Stronach. He's the local guy who made good and he has likely made another good deal which will eventually enable him to sell European made Chevvies into Russia. I'm not so happy if there was some additional value there that could have been captured by a trustee because ultimately my taxes are going to support whatever remains of GM once they get done selling all the easy to sell stuff.

The rule has always been:

• If you owe the bank a million dollars and can't pay then YOU have a big problem.
• If you owe the bank a hundred million dollars and can't pay then THE BANK has a big problem.

To that I guess we now have to add:

• If you owe one hundred billion dollars then the taxpayers have got a big problem.