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The Obama administration auto bailouts have been criticized on the grounds that they privileged the interests of the UAW, a political ally of the Democratic Party and the president, at the expense of the rule of law and the legitimate claims of other claimant groups involved in the General Motors and Chrysler bankruptcies. However, this argument is premised upon some false ideas about organized labor and bankruptcy. In this paper I will use the political, legislative and legal history of union claimant groups during Chapter 11 reorganization to challenge these ideas. In doing so I will demonstrate that, in spite of repeated legal, political and legislative campaigns to amend the bankruptcy code to better accommodate Labor’s interests, unionized employees are still a marginalized voice during bankruptcy reorganization due to the narrow goals which guide the federal bankruptcy regime’s statutory framework, administrative procedures and common law precedents. This argument will inform a revised evaluation of the strengths and weaknesses of the Obama administration auto bailouts.
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Klein, William, "The Rule of Law, the Rights of Labor, and the Auto Industry Bailouts" (2012). Senior Projects Spring 2012. 242.
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