Matthew T. Berry Bankruptcy Law Blog on Lawyers.com

The news of a federal judge approving Chrysler’s plan to shut down 789 dealer franchises sent shock waves through Detroit and the rest of America. These dealerships represent approximately 25% of the carmaker’s showrooms but only 14% of its total sales. The decision seemed to make sense for Chrysler, which recently filed bankruptcy protection under Chapter 11. Chapter 11 gives a company the option to have its debts reorganized and partially forgiven, as opposed to Chapter 7 which forces a company to close down its business and sell its remaining assets to pay off creditors - Atlanta business bankruptcy.

Not every city was hit hard by the closures. In Metro Atlanta, only a handful of Chrysler’s 32 dealerships were given pink slips. However, that good news may be short lived. General Motors is expected to announce that it will be cutting several Metro Atlanta area dealerships from its retail network. Bankruptcy lawyers in Atlanta should prepare for a deluge of calls.

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