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Obama not eyeing prepackaged carmaker bankruptcies

CHICAGO
Fri Nov 21, 2008 11:15am EST
President-elect Barack Obama's motorcade leaves his Kenwood area home and travels to his transition office in Chicago, November 19, 2008. REUTERS/Frank Polich

CHICAGO (Reuters) - President-elect Barack Obama's transition team is not exploring a prepackaged bankruptcy plan for U.S. automakers, officials from Obama's team said on Friday.

Bloomberg News reported that Obama's transition group was exploring the option.

"That's not true," said Tommy Vietor, a spokesman for Obama's White House transition team.

Bloomberg reported that Obama's team was considering a swift prepackaged bankruptcy for automakers as an answer to the financial woes of the sector, citing a person familiar with the matter.

According to the report, Obama's team has already contacted at least one bankruptcy law firm to say that Daniel Tarullo, who heads Obama's economic policy working group, would call to discuss the workings of a so-called "prepack."

Two officials within the Obama team said the report was false.

U.S. lawmakers on Thursday asked General Motors Corp, Ford Motor Co and Chrysler LLC to provide a business survival plan in exchange for their support of up to $25 billion in loans.

(Reporting by Jeff Mason, editing by Gerald E. McCormick/Jeffrey Benkoe)


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