Car czar offers 'bankruptcy lite'

The headline of this CNN piece caught my attention. It goes through some of the strings that may be attached to the automotive industry bail out as well as suggests that some of the end results of decisions made by the "Car Czar" would be similar to the outcome of what a bankruptcy would do:

The plan sounds like the sort of arrangement a much smaller company might make with a single big creditor when default looms, Coulter pointed out. "To me it reads like a forbearance agreement from a lender," he said.

In a case where a smaller company is at risk of loan default, a major creditor can appoint an overseer and dictate terms of the company's restructuring without requiring bankruptcy proceedings.

This arrangement avoids most of the dangers of a bankruptcy, which carmakers fear because they say car shoppers would be scared to buy from a company they think might go out of business.