Flushed with the immediate tactical success of the Chrysler bankruptcy, the US administration’s plans for the subsequent GM filing are moving forward, along the lines laid out a couple of weeks ago. The White House’s auto task force, with the UAW, the car workers’ union, behind it, could have had a quick, consensual trip in and out of court, but apparently that wasn’t what they wanted.

The “363” plan (a provision under the Bankruptcy Act that allows the company to sell assets), is the means for a “good GM” funded by the government to buy assets from the existing company, or “bad GM”. The plan, based on a review of some fairly clear precedents from past cases, is a legally flawed way to disregard the rights of certain creditors – in GM’s case, their public bondholders.