Word: chaptered
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...phenomenon we now know as Chapter 11 bankruptcy was born during the financial panics that regularly pummeled the U.S. economy in the 1800s. Railroads had emerged as the country's first large industrial corporations, and every time the markets crashed and the economy slumped, many found themselves unable to pay their bills...
...reorganization option faded after William O. Douglas (then SEC chairman, later a Supreme Court Justice) persuaded Congress in 1938 to approve more punitive bankruptcy laws, but it was resurrected by Congress in 1978 as Chapter 11 of the bankruptcy code. Since then Chapter 11 has been used to reorganize airlines, steelmakers and countless other companies in trouble...
...center. Over the past quarter-century, though, a "shadow banking system" of investment firms, hedge funds and derivatives dealers grew up that was subject to the same risks as banks but not the same rules. In September, Lehman Brothers, a major cog in this system, filed for Chapter 11. In one sense the process worked as designed--much of Lehman lives on under the names Barclays and Nomura. But the resulting run on the financial system sent Ben Bernanke and Hank Paulson scurrying in panic to Capitol Hill to ask for a $700 billion bailout...
Rick Wagoner, CEO of General Motors, the automaker in most imminent danger of failure, gave lawmakers three reasons Chapter 11 isn't an option. First, the special financing that usually tides companies over through reorganization is so scarce right now that GM might not be able to get enough to keep functioning. Second, the stigma of bankruptcy would deter consumers from buying GM cars. Third, GM is already in the midst of a dramatic reorganization that will pave the way to a profitable future...
...other automakers have cut costs sharply, especially since 2005, and the United Auto Workers union has made historic concessions. But GM could accomplish even more along those lines, plus reduce the big debts it has incurred trying to settle pension and retiree health-care obligations, under Chapter 11 protection...