I never knew about that law. I do know many cases in which labor contracts were abrogated & none when permission was denied.
Am I missing something? Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901 www.michaelperelman.wordpress.com -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of David B. Shemano Sent: Monday, December 08, 2008 9:54 AM To: Progressive Economics Subject: RE: RE: [Pen-l] Re: GM Michael Perelman writes >> Getting back to Jim's point about protecting contracts, the treatment of >> GM workers is another example of an attempt to abrogate contracts. Randomly picking Michael's comment among others to respond to, as I have stated multiple times on this list, union contracts are uniquely protected under the Bankruptcy Code, which, after all, is precisely about abrogating contracts. The Bankruptcy Code essentially grants companies an absolute right to "reject" (i.e. stop performing under) their contracts. Uniquely, there is a specific Bankruptcy Code provision that restricts the ability of a company to reject a labor agreement -- the company must demonstrate that it has exhausted good faith bargaining efforts and that the equities favor rejection. As a practical matter, not an easy thing to do -- the company must essentially convince the bankrputcy judge that the company will have to liquidate if it can't revise the labor agreement. Regarding GM, the bondholders are going to inevitably take a massive haircut, as will the unions. The only question is how much money the existing GM constituencies (management, labor, bondholders) can suck out of the taxpayer before the haircut takes effect. David Shemano _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
